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RALLIS

A Enterprise Sixty-fifth annual report 2012-2013

ContentsBoard of Directors 2and Corporate Information

Chairman’s Statement 3-5

Notice of Meeting 6-8

Explanatory Statement 9-11

Directors’ Report 12-20

Management Discussion and Analysis 21-32

Report on Corporate Governance 33-47

Auditors’ Report 48-51

Balance Sheet 52

Statement of Profit and Loss 53

Cash Flow Statement 54-55

Notes to Financial Statements 56-82

Balance Sheet Abstract 83

Annual General Meeting : Monday, 24th June, 2013

Time : 4.00 p.m.

Venue : Auditorium,Yashwant Rao Chavan Pratishthan,Chavan Centre,General Jagannath Bhosale Marg,Mumbai 400 021.

Rallis India Limited

BOOK CLOSURE DATES11TH JUNE, 2013 TO 24TH JUNE, 2013

Consolidated Financial Statements

- Auditors’ Report 85

- Balance Sheet 86

- Statement of Profit and Loss 87

- Cash Flow Statement 88-89

- Notes to Consolidated Financial 90-117Statements

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Sixty-fifth annual report 2012-2013

RALLIS


Board of DirectorsR. Gopalakrishnan (Chairman)

Homi R. Khusrokhan

B. D. Banerjee

E. A. Kshirsagar

Prakash R. Rastogi

Bharat Vasani

K. P. Prabhakaran Nair

R. Mukundan

Yoginder K. Alagh

Y. S. P. Thorat

V. Shankar (Managing Director & CEO)

Company SecretaryP. S. Meherhomji

Corporate Identity Number (CIN)

L36992MH1948PLC014083

Registered Office156/157 15th Floor Nariman Bhavan227 Nariman PointMumbai 400 021Tel. No. 6665 2700Fax No.6665 2827E-mail address: [email protected]: www.rallis.co.in

AuditorsDeloitte Haskins & Sells

Solicitors & AdvocatesCrawford Bayley & Company

Senior LeadershipV. Shankar Managing Director & CEO

K. R. Venkatadri Chief Operating Officer - AgriBusiness

Ashish Mehta Financial Controller

M. M. Tripathy Vice President - Human Resources& Business Excellence

Ravindra R. Joshi Vice President - Manufacturing

Subhash R. Kadam Vice President - Research &Development

K. B. Belliappa Vice President - StrategicAlliances

C. M. Singh Vice President - Domestic Sales

D. G. Shetty Vice President - InternationalBusiness

P. V. Reddy Vice President - Marketing & CRMServices

Umesh K. Mehendale Vice President - Agri Services

Malik Shah Vice President - Planning &Procurement

Coomie N. Kapadia Head - Internal Audit

Share Registrars and Transfer AgentsTSR Darashaw Pvt. Ltd.6-10 Haji Moosa Patrawala Industrial Estate,20 Dr. E. Moses Road,Mahalaxmi,Mumbai 400 011.Tel. No. 6656 8484Fax No. 6656 8494E-mail address: [email protected]: www.tsrdarashaw.com

BankersState Bank of IndiaCitibank N.A.Corporation BankBNP ParibasIDBI Bank LimitedAxis Bank LimitedICICI Bank LimitedHDFC Bank LimitedOriental Bank of CommerceKotak Mahindra Bank Limited

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CHAIRMAN’S STATEMENT

Dear Shareholders,

I would like to touch upon recent trends in agriculture and your Company’s response to these trends.

TRENDS IN AGRICULTURE

Advance Estimates have pegged the growth of agriculture and allied activities at 1.8% in 2012-13. This is not spectacular;however there have been variations in agriculture performance across regions and crops. The average conceals somepositives which suggest changes in agriculture. For example:

a. Agricultural rainfall is different from the weather rainfall. Even when the weather is erratic, agriculture in parts maydo well. For instance, agriculture growth rate of Madhya Pradesh for year 2012-13 is healthy at 14.28 per centi, whilesome States observed muted or negative growth. Bihar grew at an impressive 9.5% over last year. In Karnataka 2012-13, despite the drought in 157 talukas, the agricultural sector is likely to register a growth of 1.8% against minus2.2% in 2011-12.

b. Progressive farmers are increasingly adoptive of latest tools, techniques and practices. This is leading to short-termand long-term benefits. For instance, crop diversification into high-value produce is a healthy sign in terms ofmeeting the consumer demand curve in the short-term as well as improving the soil quality in the long-term. In factcrop diversification is one key intervention to address the grave issue of soil degradation.

According to a report prepared by CII-McKinsey, “There has been a marked shift in production from basic food grainsto high-value produce, especially fruits and vegetables. In 2000, basic food grain formed 60 per cent of the totalproduce by weight, while fruits, vegetables and meat and fibre formed only 38 per cent. By 2010, there was a shift tohigh-value crops, which formed 45 per cent of total production.”

c. Rural income and consumption expenditure has seen an upward trend. Rural buying power is at a high compared toprevious years. According to provisional results from NSSO carried out in mid-2012, India’s rural income grew at amuch faster clip between 2010 and 2012 than in the previous years. Another survey by Crisil in August 2012indicates that rural spending outpaced urban spending between 2009-10 and 2011-12 for the first time in nearly 25years. Discretionary spending of a typical rural Indian household rose to `24,000 in 2009-10, from `14,000 in2004-05, growing at about 11% per annum, which is faster than the inflation rate of nearly 6% per annum over thesame period. This trend is encouraging and bodes well for the future of agriculture.

These examples demonstrate that, despite patchy weather, an alert Company can find segments to serve in Indianagriculture. Nonetheless there are broader policy issues that need to be addressed:

a. Although Government subsidies on fertilizers / food as well as schemes like MGNREGA have put more money in thehands of farmers, these are initiatives that need deeper study as these have also led to some unintended consequences.A report by Commission for Agricultural Costs and Prices (CACP) indicates that with only 2-3% of all agriculture jobsbeing generated by MGNREGA, it cannot be driving agriculture wage growth and fuel rural economy. The reportstates that instead, increase in State and agriculture GDP have a more pronounced impact on farm wages. It concludesby saying that marginal returns on public investments in agriculture are at least 5-10 times more than those onsubsidies such as fertilisers, power and so on. Right now the country spends close to `40,000 Cr on MGNREGA andanother `200,000 Cr on fertiliser / food subsidy. Perhaps a deeper analysis by policy makers and a more balancedallocation between subsidies and gross capital formation can further accelerate the growth and address the needsof all segments of farmers.

b. Nutrient Based Subsidy (NBS) policy, has led prices of NPK fertilizers to be market determined while price of ureacontinues to be administratively decided. Consequently, price of urea is much lower than that of other fertilizers. Thishas resulted in excessive use of urea, thereby distorting the balanced norms of fertilizer application.


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c. Price incentives also might not be too relevant for a large majority of marginal farmers. According to AgriculturalCensus 2010-11, out of 138 million farming holdings in the country, 117 million are small and marginal holdings.From 62% in 1960-61, small and marginal landholdings are now close to 85% of total holdings (2010-11). Withalmost half of the cultivated area, they account for more than two-thirds of national vegetables and milk productionand more than half of cereals and fruits produced. The Planning Commission has concluded, that “the small andmarginal farmers are certainly going to stay for a long time in India”. But, with very little marketable surplus, theirfarming is hardly commercial. And that is why interventions like MSP and procurement prices do not touch thesefarmers with negligible marketable surplusii.

d. Retaining and inducting new talent in agriculture is tough as urbanization might increasingly prompt next generationto move away from farming. This threat also extends to finding the right people in Agri Companies and extensionservices.

RALLIS RESPONSE

Taking note of the opportunities and challenges facing the sector, your Company has undertaken several strategic andoperational initiatives. The section below gives a snapshot of the same.

Growing NPP (Non-pesticide portfolio)

As mentioned last year your Company strives to create new and relevant products and create a portfolio of agri-inputsand services that addresses critical needs of the farmers. This will address the changing farmer and agriculture needs aswell as leverage the competencies in Rallis including that in the technical and manufacturing space. Rallis continues tomonitor what is internally called ‘innovation turnover index’ to ensure that the sale from new products is a significantproportion of total sales. Rallis has traditionally been strong in crop protection marketing and will continue to grow byproviding value added solutions for farmers in this space. As part of balancing its portfolio of business, Company is alsofocusing on growing an equally compelling portfolio for non-pesticides products like Plant Growth Nutrients, Seeds,micro-nutrients, contract manufacturing, etc. The aspiration continues to improve the share of non-pesticide businessfrom current levels of 10% to 40% in the next few years.

Excessive and imbalanced usage of chemical fertiliser is leading to soil degradation. Depletion in soil organic content isresponsible for various other issues as it influences soil structure, water retention, microbial activities, soil aeration andnutrient retention. As mentioned last year, your Company by acquiring stake in Zero Waste Agro Organics Pvt. Ltd., is nowable to manufacture and market, scientifically prepared organic compost, derived out of wastes from sugar industry.Geogreen, as it is branded, was introduced during the year. It has been very well received by farmers who are able to seecrop productivity improvement by its usage. The aspiration is to further make the brand grow so that more and morefarmers are benefited by its application.

The opportunity to scale up the seeds business is equally attractive. Quality seeds are one of the key agricultural inputs,which determine the productivity of the crops. Quality of the seed used largely determines the efficacy of other agriculturalinputs like fertilizers and pesticidesiii. It is estimated that quality of seed accounts for 20-25% of productivity. A majoritystake in Metahelix has given your Company the head-start in this important product segment. The strategy is to leverageresearch capabilities of Metahelix and the distribution strength of Rallis to create and establish relevant brands forfarmers. During the year, extensive field activities were conducted to establish the new brands.

Strengthening farmer connect

This relevant product mix is amply supported by services and existing farmer connect, in order to emerge as completesolutions provider to the farmer community. Our farmer relationship building activities such as Rallis Kisan Kutumba,Grow More Pulses (MoPu) moved to the next orbit with significant increases in farmer contacts and field level productivityimprovement programmes. In fact RKK membership base has grown to 1 Million farmers during the current year. Inaddition to this, going forward, the Company has added more value added services such as sms alerts on crop prices,weather and possible disease outbreak through Samrudh Krishi.

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Augment Agri-training

The Company has embarked on some noteworthy initiatives to create trained manpower to sell agri-solutions to farmers.Tata Rallis Agri Inputs Training Scheme (TRAITS) is a unique initiative started for promoting employability of non-graduate,rural youth from farming background, by imparting them training in the Agri-marketing and crop advising field. Thismakes them employable for a career in Agri marketing and crop advising. Thus it is not only making the unemployedrural youths employable, but is also increasing the number of crop advisors in the field which benefits the farmercommunity as a whole. This initiative was rolled out as a pilot at three locations namely, Baramati (Maharashtra), Birbhum(West Bengal) and Dharwad (Karnataka).This year your Company extended TRAITS to Bhubaneswar in Odisha and Nalandain Bihar.

Nurture engaged employees

Your Company realises that only motivated and engaged employees can drive the Company’s agenda of creating valuefor farming community, society and shareholders. And that is why Company places special focus on employee engagement,functional competence and talent management. Last year’s engagement survey had indicated that the ratio of highlyengaged to actively disengaged employees in your Company was 15:1 which is way better than the ratio that world classorganizations enjoy. This year a different agency undertook employee engagement survey and I am happy to share thatEmployee Engagement Score for Rallis is 80%, which is higher than the Average Score for Manufacturing Industries andthe Best Employer India score. This year, the Company also participated in a survey conducted by ‘Great Place to WorkInstitute’. The score is 82%, which is equal to the average of top 50 companies which participated in the survey.

The Company identifies developmental needs of employees through various means like competency mapping, annualappraisals, organizational needs and new business initiatives. Training and development plans thus devised are completelyaligned with organizational vision and help employees achieve their true potential. Furthermore, the Company constantlyworks on building a leadership pipeline through initiatives, such as Employee Growth Scheme, Rallis LeadershipDevelopment Programme for first time managers and Rallis Customized Leadership Development programmes for highpotential managers. Other initiatives include competency mapping for critical positions, individual development plansand mentoring for high potential employees. These initiatives have ensured that Rallis continues to have a highly motivatedworkforce.

ACKNOWLEDEGMENT

I am happy to state that most of the interventions talked about have also resulted in a very profitable 2012-13 with yourCompany crossing the milestone consolidated gross sales of `1500 Cr, a growth of 16% over previous year, despite thetough environment and business conditions. PAT also grew by 20% to `119 Cr. I would not touch upon the operationaland financial details as it will be covered by management in due course.

I would like to conclude by thanking the employees and shareholders of the Company for their constant support andfaith in the Company.

ChairmanMumbaiMay 14, 2013

i Indian Express, estimates by CSO, Madhya Pradesh topples Bihar in growth rate in 2012-13, dated 31/03/2013ii Agriculture Census 2010-11, Distribution of number of holdings and area operated in India & Article titled, “The survival of the smallest”,

by S. Gurumurthy, The Hindu Business Lineiii State of Indian agriculture 2012-13, Govt of India, Ministry of Agriculture


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RALLIS INDIA LIMITED

NOTICE OF MEETING

NOTICE is hereby given that the 65th Annual General Meeting of Rallis India Limited will be held at the Auditorium,Yashwant Rao Chavan Pratishthan, Chavan Centre, General Jagannath Bhosale Marg, Mumbai 400 021, on Monday,the 24th June, 2013 at 4.00 p.m. to transact the following business:

1. To receive, consider and adopt the audited Statement of Profit and Loss for the year ended 31st March, 2013 and theBalance Sheet as at that date together with the Report of the Directors and that of the Auditors thereon.

2. To confirm the payment of Interim Dividend for the year 2012-13 and to declare a Final Dividend for the year 2012-13on Equity Shares.

3. To appoint a Director in place of Mr. R. Mukundan who retires by rotation and is eligible for re-appointment.

4. To appoint a Director in place of Dr. Yoginder K. Alagh who retires by rotation and is eligible for re-appointment. He hasoffered himself for re-election and his term would be up to February 2014.

5. To appoint a Director in place of Mr. E. A. Kshirsagar who retires by rotation and is eligible for re-appointment.

6. To appoint Auditors and to fix their remuneration.

7. Payment of Commission to Directors

To consider and, if thought fit, to pass with or without modification, the following Resolution as a Special Resolution:

RESOLVED THAT pursuant to the provisions of Section 309 and other applicable provisions, if any, of the CompaniesAct, 1956 (‘the Act’), such sum by way of commission, not exceeding one percent per annum of the net profits of theCompany computed in the manner referred to in Sections 198, 349 and 350 of the Act for each of the five financialyears of the Company commencing from 1st April, 2013 be paid to and distributed amongst such Directors of theCompany (other than the Managing Director and/ or Wholetime Director(s), if any), in such amounts or proportionsand in such manner and in all respects as may be directed by the Board from time to time.

Notes:

1. The Explanatory Statement, pursuant to Section 173 of the Companies Act, 1956 in respect of the business under ItemNo.7 above is annexed hereto. The relevant details of Directors seeking re-appointment under Item Nos.3 to 5 above,pursuant to Clause 49 of the Listing Agreements entered into with the Stock Exchanges are also annexed.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTENDAND VOTE INSTEAD OF HIM AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. Proxies, in order to beeffective, must be received at the Company’s Registered Office not less than 48 hours before the meeting. Proxiessubmitted on behalf of companies, societies, partnership firms, etc. must be supported by appropriate resolution/authority, as applicable, issued on behalf of the nominating organization.

3. Corporate Members intending to send their authorized representatives to attend the Meeting are requested to sendto the Company, a certified copy of the Board Resolution authorizing the representative to attend and vote on theirbehalf at the Meeting.

4. Members/ Proxies should bring the enclosed Attendance Slip duly filled in, for attending the Annual General Meeting,along with their copy of the Annual Report. Copies of the Annual Report will not be distributed at the Meeting.

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5. Book Closure and Dividend:

(a) The Register of Members and the Share Transfer Books of the Company will be closed from Tuesday, 11thJune, 2013 to Monday, 24th June, 2013 (both days inclusive).

(b) If dividend on Equity Shares, as recommended by the Directors, is approved at the Meeting, the payment of suchdividend will be made on 26th June, 2013 as under:

(i) To all Beneficial Owners in respect of shares held in electronic form, as per details furnished by the Depositoriesfor this purpose as on beginning of 11th June, 2013.

(ii) To all Members in respect of shares held in physical form, whose names are on the Company’s Register ofMembers on 11th June, 2013.

6. National Electronic Clearing Service (NECS):

(a) To avoid loss of dividend warrants in transit and undue delay in receipt of dividend warrants, the Company hasprovided National Electronic Clearing Service (NECS) facility to the Members for remittance of dividend. NECSfacility is available at locations identified by Reserve Bank of India from time to time. Members holding shares inphysical form and desirous of availing this facility are requested to provide their latest bank account details (CoreBanking Solutions Enabled Account Number, 9 digit MICR and 11 digit IFS Code), along with their Folio Number, tothe Company’s Share Registrars and Transfer Agents, TSR Darashaw Pvt. Ltd. Members holding shares in electronicform are requested to provide the details to their respective Depository Participants.

(b) Members holding shares in electronic form are hereby informed that bank particulars registered against theirrespective depository accounts will be used by the Company for payment of dividend. The Company or its Registrarscannot act on any request received directly from the Members holding shares in electronic form for any change ofbank particulars or bank mandates. Such changes are to be advised only to the Depository Participant of theMembers.

7. Members holding shares in physical form are requested to advise any change of address immediately to the Company’sShare Registrars and Transfer Agents. Members holding shares in electronic form must send the advice about changein address to their respective Depository Participant only and not to the Company or the Company’s Share Registrarsand Transfer Agents.

8. Members holding shares in physical form are requested to consider converting their holdings to dematerialized formto eliminate risks associated with physical shares and for ease in portfolio management. Members can contact theCompany’s Share Registrars and Transfer Agents for assistance in this regard.

9. Nomination Facility:

As per the provisions of the Companies Act, 1956 facility for making nomination is available for the Members in respectof the shares held by them. Nomination forms can be obtained from the Company’s Share Registrars and TransferAgents by Members holding shares in physical form. Members holding shares in electronic form may obtain Nominationforms from their respective Depository Participant.

10. Unclaimed Dividends:

Pursuant to Section 205A of the Companies Act, 1956, all unclaimed/ unpaid dividends up to the financial year ended31st March, 1995 have been transferred to the General Revenue Account of the Central Government. Members who


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have not yet encashed their dividend warrants for the said period are requested to forward their claims in Form No. IIprescribed under The Companies Unpaid Dividend (Transfer to General Revenue Account of the Central Government)Rules, 1978 to –

Office of the Registrar of Companies,

CGO Complex, A Wing, 2nd Floor,

Next to Reserve Bank of India,

CBD, BELAPUR 400 614.

Members are hereby informed that after the amendment of the Companies Act, 1956, w.e.f. 31st October, 1998, theCompany is obliged to transfer any money lying in the Unpaid Dividend Account, which remains unpaid or unclaimedfor a period of seven years from the date of such transfer to the Unpaid Dividend Account, to the credit of InvestorEducation and Protection Fund (’the Fund’) established by the Central Government. In accordance with Section 205Cof the Companies Act, 1956, no claim shall lie against the Company or Fund in respect of the amounts transferred tothe Fund.

As per the above provisions, unclaimed/ unpaid dividend for the years upto the financial year ended 31st March, 2005has been transferred by the Company to the Fund. Members who have not yet encashed their dividend warrant(s) forany subsequent financial years are requested to make their claims to the Company without any delay.

It may be noted that the unclaimed/ unpaid dividend for the financial year ended 31st March, 2006 is due fortransfer to the Fund on 30th June, 2013.

11. The Securities and Exchange Board of India (SEBl) has mandated the submission of Permanent Account Number (PAN)by every participant in the securities market. Members holding shares in electronic form are, therefore, requested tosubmit their PAN details to their respective Depository Participants. Members holding shares in physical form arerequested to submit their PAN details to the Company or its Share Registrars and Transfer Agents.

By Order of the Board of Directors

P. S. MEHERHOMJICompany Secretary

Dated: 25th April, 2013

Registered Office:

Rallis India Limited156/157 15th FloorNariman Bhavan227 Nariman PointMumbai 400 021

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EXPLANATORY STATEMENT PURSUANT TOSECTION 173 OF THE COMPANIES ACT, 1956

Pursuant to Section 173 of the Companies Act, 1956 (‘the Act’), the following Explanatory Statement sets out all materialfacts relating to the business mentioned under Item No.7 of the accompanying Notice dated 25th April, 2013.

Item No. 7:

The Members of the Company at their 60th Annual General Meeting held on 30th May, 2008 had approved the payment ofremuneration by way of Commission to the non-whole time Directors of the Company not exceeding one percent perannum of the net profits of the Company computed in the manner referred to under Section 198 of the Companies Act,1956. The remuneration was to be distributed amongst such of the Directors (other than the Managing Director and/orWholetime Directors) and in such proportion and manner as the Board may decide for each of the five financial years of theCompany from 1st April, 2008.

Since the said resolution was valid upto 31st March, 2013, as per the provisions of Section 309 of the Companies Act, 1956,it is proposed to pass a Special Resolution enabling the payment of commission to Directors (other than the ManagingDirector and/or Wholetime Director(s), if any) for five financial years commencing from 1st April, 2013.

All the Directors of the Company except Mr. V. Shankar are concerned or interested in the Resolution mentioned at ItemNo. 7 of the accompanying Notice to the extent of Commission that may be received by them.

By Order of the Board of Directors

P. S. MEHERHOMJICompany Secretary

Dated: 25th April, 2013

Registered Office:

Rallis India Limited156/157 15th FloorNariman Bhavan227 Nariman PointMumbai 400 021


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Details of Directors seeking re-appointment at the forthcoming Annual General Meeting(Pursuant to Clause 49 of the Listing Agreement)

Name of Director

Date of Birth

Date of Appointment

Expertise in specific functional areas

Qualifications

No. of shares held in the Company

List of companies in whichDirectorship held as on 31.03.2013

Mr. R. Mukundan

19.09.1966

03.12.2009

Mr. Mukundan has wide experiencein the field of Strategy & BusinessDevelopment, Corporate Quality &Business Excellence, CorporatePlanning and Manufacturing. He wasExecutive Vice President of theGlobal Chemicals Business and theConsumer Products in TataChemicals Ltd. from 2007 and iscurrently its Managing Director.

BE (Electrical Engineering) from IIT,Roorkee and MBA from FMS, DelhiUniversity. Also attended theAdvanced Management Programmeat Harvard Business School in 2008.

NIL

PUBLIC COMPANIES1. Rallis India Ltd.2. Tata Chemicals Ltd. - Managing

Director3. Tata International Ltd.4. Metahelix Life Sciences Ltd.5. Dhaanya Seeds Ltd.

OVERSEAS COMPANIES1. Homefield International Pvt. Ltd.2. Homefield Pvt. UK Ltd.3. Tata Chemicals Africa Holdings

Ltd.4. Tata Chemicals Magadi Ltd.5. Homefield 2 UK Ltd.6. Tata Chemicals (Europe)

Holdings Ltd.7. Gusiute Holdings (UK) Ltd.8. Valley Holdings Inc.9. Tata Chemicals North America

Inc.10. General Chemical International

Inc.11. NHO Canada Holdings Inc.12. TCSAP LLC13. General Chemical (Great Britain)

Ltd.14. General Chemical Canada

Holdings Inc.15. GCSAP Canada Inc.16. TCSAP Holdings (DE General

Partnership)17. Tata Chemicals (Soda Ash)

Partners ( TCSAP) (DE GeneralPartnership)

Dr. Yoginder K. Alagh

14.02.1939

22.04.2010

Dr. Alagh is a former Minister ofPower & Planning, Science &Technology - Government of India,Chairman of BICP, Chairman of IRMAand has held various positions ofpower with the Government. Aneminent Economist, Dr. Alagh haswide experience in policy makingand planning.

Master’s Degree in Economics fromthe University of Rajasthan andMaster ’s Degree and DoctoralDegree in Economics from theUniversity of Pennsylvania, USA.

NIL

PUBLIC COMPANIES1. Rallis India Ltd.2. Tata Chemicals Ltd.3. Shree Cements Ltd.4. Somany Ceramics Ltd.5. Star Agri Warehousing Collateral

Management Ltd.

Mr. E. A. Kshirsagar

10.09.1941

24.02.2006

Mr. Kshirsagar has wide experiencein Corporate Strategy & Structure,Valuation, Feasibility Studies,Disinvestments/ Mergers &Acquisitions.

Fellow Member of the Institute ofChartered Accountants, England andWales

NIL

PUBLIC COMPANIES1. Rallis India Ltd.2. Tata Chemicals Ltd.3. Batliboi Ltd.4. HCL Infosystems Ltd.5. JM Financial Ltd.6. Manappuram Finance Ltd.7. Merck Ltd.8. JM Financial Products Ltd.

PRIVATE COMPANIES1. Manipal Global Education

Services Pvt. Ltd.

OVERSEAS COMPANIES1. Tata Chemicals Europe

Holdings Ltd., U.K.2. Tata Chemicals Magadi Ltd.,

U.K.3. Vama Sundari Investments Pvt.

Ltd., Mauritius

11

18. Bio Energy Venture - 1(Mauritius) Pvt. Ltd.

19. Tata Chemicals International Pte.Ltd.

20. Indo-Maroc Phosphore S.A.21. Grown Energy (Proprietary) Ltd.22. Grown Energy Zambeze

Holdings Pvt. Ltd.23. Grown Energy Zambeze

Limitada24. EPM Mining Ventures Inc., USA25. Tata South East Asia Ltd.,

Hong Kong

1. Tata Chemicals Ltd.- Shareholders’/ Investors’Grievance Committee

1. Rallis India Ltd.- Audit Committee

2. Tata Chemicals Ltd.- Audit Committee- Shareholders’/Investors’

Grievance Committee(Chairman)

3. Shree Cements Ltd.- Audit Committee- Shareholders’/Investors’

Grievance Committee4. Somany Ceramics Ltd.

- Audit Committee5. Star Agri Warehousing Collateral

Management Ltd.- Audit Committee

1. Rallis India Ltd.- Audit Committee (Chairman)- Shareholders’/ Investors’

Grievance Committee2. Tata Chemicals Ltd.

- Audit Committee3. Batliboi Ltd.

- Audit Committee (Chairman)4. JM Financial Ltd.

- Audit Committee (Chairman)5. HCL Infosystems Ltd.

- Audit Committee (Chairman)6. Merck Ltd.

- Audit Committee7. JM Financial Products Ltd.

- Audit Committee (Chairman)8. Manappuram Finance Ltd.

- Audit Committee

Chairman/ Member of theMandatory Committees of the Boardof the companies on which he is aDirector as on 31.03.2013

Details of Directors seeking re-appointment at the forthcoming Annual General Meeting(Pursuant to Clause 49 of the Listing Agreement)

Name of Director Mr. R. Mukundan Dr. Yoginder K. Alagh Mr. E. A. Kshirsagar


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DIRECTORS’ REPORT

TO THE MEMBERS OF RALLIS INDIA LIMITED

The Directors hereby present their Sixty-fifth Annual Report on the business and operations of the Company and thefinancial accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

` Crores

Standalone Consolidated

2012-13 2011-12 2012-13 2011-12

Revenue from operations (Gross) 1418.58 1260.07 1552.98 1353.70

Excise Duty (94.80) (78.82) (94.80) (78.82)

Revenue from operations (Net) 1323.78 1181.25 1458.18 1274.88

Other Income 11.45 7.50 11.74 6.87

1335.23 1188.75 1469.92 1281.75

Profit/ (-) Loss before Finance cost,Depreciation and Tax 214.68 204.76 222.31 209.83

Finance Costs (12.52) (10.37) (18.49) (14.59)

Depreciation (28.81) (27.11) (31.53) (28.66)

Profit/ (-) Loss before exceptional item 173.35 167.28 172.29 166.58

Exceptional item:

– Cessation cost - (17.19) - (17.19)

Profit before Tax 173.35 150.09 172.29 149.39

Provision for Tax (38.72) (38.18) (38.72) (38.19)

Deferred Tax (15.25) (10.52) (14.77) (10.51)

Profit for the year before minority interest 119.38 101.39 118.80 100.69

Minority Interest - - 0.21 (1.51)

Profit for the year 119.38 101.39 119.01 99.18

Balance of Profit brought forwardfrom previous year 242.03 213.01 241.40 214.58

361.41 314.40 360.41 313.76

Appropriations

Debenture Redemption Reserve (12.50) (12.50) (12.50) (12.50)

Transfer from/ (to) General Reserve (11.93) (10.14) (11.93) (10.14)

Interim Dividend (19.45) (19.45) (19.45) (19.45)

Income Tax on Interim Dividend (3.15) (3.15) (3.15) (3.15)

Proposed Equity Dividend (25.28) (23.34) (25.28) (23.34)

Income tax on Equity Dividend (4.30) (3.78) (4.30) (3.78)

Balance Profit/(-) Loss carried forwardto Balance Sheet 284.80 242.03 283.80 241.40

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DIVIDEND

The Board of Directors had declared an interim dividend of `1/- per share (100%) on the Equity Shares of the Company,in October 2012. The Directors are pleased to recommend a final dividend of `1.30 per share (130%) on the Equity Shares.This will take the total dividend for the year to `2.30 per share (230%) (Previous year `2.20 per share, i.e. 220%).If the final dividend, as recommended above, is declared by the Members at the Annual General Meeting, the totaloutflow towards dividend on Equity Shares for the year would be `52.18 Crores (including dividend tax) (Previous Year`49.72 Crores).

COMPANY PERFORMANCE

The Company achieved a new landmark in revenues, crossing the `1,500 Crores milestone. The Company’s profit beforetax on a consolidated basis, is `172.29 Crores during the year, as compared to `149.39 Crores in the previous year, anincrease of 15% over the last year. The Company earned a net profit of `119.01 Crores, as against a net profit of `99.18Crores in the previous year on a consolidated basis.

OPERATIONS

(1) CROP PROTECTION

The year 2012-13 was a challenging year for Indian agriculture, as monsoon played truant during the main croppingseason. Tough times such as Neelam cyclone and worst drought in few key States were also added challenges facedduring the year. The Central Statistical Organization (CSO) has estimated the growth of agriculture (which includesfood grains, oilseeds, sugarcane and fibre crops) and allied activities (which includes livestock, fisheries and forestry)at 1.8% in 2012-13, as compared to 3.6% during 2011-12. However, food grain production during 2012-13 crop yearis estimated to fall to 255.36 million tonnes, from a record 259.32 million tonnes in the previous year, due to irregularrainfall in 2012, which took a toll on kharif cultivation and productivity. There was a decline in production of foodgrains, oilseeds, sugarcane and fibers. The share of agriculture and allied sectors in India’s GDP also declined to 13.7%in 2012-13 on account of higher growth in the non-farm sectors.

Good progress has been made though, over the last few years in segments of agriculture. Per capita availability offruits in the country has increased from 138 gms per person per day in 2005 to 175 gms per person per day in thecurrent year. Similarly, per capita availability of vegetables also increased from 279 gms per person per day to 316gms per person per day during the same period. While in 2011-12, Agri-exports touched $37 billion against importsof only $17 billion, in 2012-13, exports are likely to cross $40 billion against imports of roughly $20 billion. Grainstocks in Government godowns have been the highest at 82 million tonnes in June 2012, and is likely to cross 90million tonnes in June-July 2013, breaking all records in India.

The branded Domestic Formulation Business registered a growth of 8% during the year over the previous year,despite seasonal aberrations in crops like paddy and pulses. The industry is estimated to have recorded a lowgrowth during the year. Aggressive planning and implementation of sales and promotion on paddy, cotton, pulses,sugarcane and fruits & vegetables, taking into account on-ground realities was a key to success. EAGLE (Expansionand Aggressive Growth through Leadership and Excellence) roll out across India has helped the Company inopportunity identification, drawing actionable insights and achievement of aggressive growth targets at crop, pestand molecule level for each territory. This resulted in significant increase in volumes for our key products such asTata Mida, Manik, Asataf, Ergon, Blitox, Tata Panida, Atrataf, Tata Metri, Fujione and Taarak.

Our customer relationship building activities, branded under the umbrella of Rallis Kisan Kutumba (RKK) movedinto the next orbit, with a connect to one Million RKK farmers being digitized into the system, successful introduction


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of key initiatives such as Samruddh Krishi, expansion of MoPu (grow More Pulses), State partnership, Prerna andothers. These initiatives, along with customer centric promotional activities and product portfolio current with themarket needs, has helped farmers to a great extent in protecting their crops effectively, improving quality and yieldof produce and ultimately in improving their standard of living.

The International Business Division registered an increase of 9% in sales, as compared to 2011-12. The increase insales was due to rising demand for crop commodities and price improvement in wheat and cotton. InternationalBusiness comprised 32% of the total revenues of the Company. This is in line with our APOLLO aspirations as part ofour Long Term strategy. While the rupee depreciation translated into higher revenue growth, there was also asignificant volume growth in key manufactured products exported to Latin America and USA under contractmanufacturing business.

The Domestic Institutional Business continued with its sales of crop protection and seed treatment chemicals andhousehold pesticide products to major customers during the year. In seed treatment chemicals, the Companyconsolidated its position and there are plans for significant growth in this segment.

(2) NON-PESTICIDE PORTFOLIO (NPP)

Alongside growing the Crop Protection business, your Company is also building a robust Non-Pesticide Portfolio ofbusinesses to cater to the changing needs of the farmers and agriculture. This not only leverages the deep farmerconnect your Company has, but also provides a large platform to serve the emerging needs of the sector.

Seeds and Plant Growth Nutrients: After acquiring a majority stake in Metahelix Life Sciences, a research-led SeedsCompany in December 2010, this year the Company focused its efforts on establishing seed brands in varioussegments. During the year, your Company has intensified the branding activities to establish the brands which werelaunched last year.

Your Company is giving focused attention to improving the quality of life of the Agriculture community in India. Asa move towards sustainable agriculture, your Company is increasing its focus on greener and cleaner products.Launch of Tata Uphaar, a 100% organic growth Promoter and Gluco Beta, a unique blend of Carbon, Proteins, PrimaryNutrients (N and K), Secondary Nutrients (Ca and Mg) and Micro Nutrients (Zn, Fe and B) in Organic form is a move inthat direction. Ralligold, a Plant Growth Nutrient, which partially reduces fertilizers consumption by enabling cropsto better utilize the applied phosphorus, will not only help the farmer increase his income, but will also help inarresting soil deterioration due to imbalanced use of chemical fertilizers.

Agri Services: Initiatives such as the Samrudh Krishi services started by the Company at Nasik for grape farmersand at Gujarat for cumin farmers have received an encouraging response from the farmers. Grow More Pulses(MoPu) programme of the Company, where the Company is actively engaged with the farmers in increasing theproductivity of pulses, as also helping them in marketing the produce, aims at embracing the entire value chain ofproducts and services to the farming community.

Soil Conditioner: During the year, the Company acquired an equity stake in Zero Waste Agro Organics PrivateLimited (ZWAOPL), a Maharashtra based Company manufacturing scientifically prepared organic compost, a soilconditioner. Your Company has introduced the product GeoGreen in key cash crops such as grapes, banana, vegetables,pomegranates, sugarcane, arecanut, ginger, potato and apple. The product acceptance has been good, as reflectedin field demonstrations and farmer testimonials. Besides existing sites for production, new production sites arebeing added to scale up volumes. GeoGreen is derived out of wastes from sugar industry, to improve soil health anddrive agriculture productivity. The technology supports sustainable agriculture and will help farmers in addressingthe challenge of food security.

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Tata Rallis Agri Inputs Training Scheme (TRAITS): This initiative aims at promoting employability of non-graduate,rural youth from the farming background, by imparting them training in the Agri-marketing and crop advising field,to enable them to take up a career in Agri marketing and crop advising. TRAITS facilitates skill development as alarger cause, while also creating a competent field team for Rallis. This year, your Company extended TRAITS toBhubaneswar in Odisha and Nalanda in Bihar.

RESEARCH & DEVELOPMENT

The Company has reinforced its Research and Development Centre (Rallis Innovation Chemistry Hub - RICH) at Bengaluruduring the year. RICH is a state of the art R & D centre, comprising Chemistry, Product Development and RegistrationDepartments. The Chemistry Department further comprises Process Chemistry, Formulation Development and AnalyticalResearch sections. Bioscience laboratories have also been set up for quick evaluation of new products.

The Company’s Research and Development efforts are focused on new and safer formulations for better efficacy, improvedvalue and services to the farmers. A number of registration dossiers have been submitted during the year for supportingdomestic and international business.

Process Chemistry focused on developing cost effective processes for molecules that are off patent, in the areas of cropprotection and having relevant market potential. Six patents were filed during the last year. Some of these are also beingfiled for world patents in relevant areas of interest. Process improvement projects were undertaken for improving productquality, yields and productivity of manufacturing processes. Process development projects for contract manufacturingopportunities were also taken up as a major activity. Environment, Health and Safety (EHS) considerations were givenspecial emphasis.

Some molecules arising out of NMITLI (New Millennium Indian Technology Leadership Initiative) project were evaluatedas lead molecules. Structural Activity Relationship (SAR) showed few more molecules that would be potentially useful.The project will be pursued further.

Product Development of new formulations was also undertaken with the help of field trials in different areas, so as toassess their bio efficacy and ensuring that these formulations are safe to use.

INDUSTRIAL RELATIONS

The overall relations with bargainable employees of the Company were cordial and harmonious during the year 2012-13.The number of employees on the rolls of the Company marginally reduced from 857 to 843 during the year.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

During the year, the Company has acquired and subscribed to equity shares representing 22.81% of the paid-up equityshare capital of Zero Waste Agro Organics Private Limited (ZWAOPL). Furthermore, the Company has been granted theright, under the Shareholders Agreement, to nominate a majority of the Directors on the Board of ZWAOPL. As a result ofthis, ZWAOPL has become a subsidiary of the Company pursuant to Section 4 of the Companies Act, 1956, with effectfrom 18th October, 2012.

The Ministry of Corporate Affairs, Government of India, has granted a general exemption to companies, by GeneralCircular No.2/2011 dated 8th February, 2011, under Section 212 (8) of the Companies Act, 1956, from attaching individualaccounts of subsidiaries with their annual reports, subject to fulfilment of certain conditions. Accordingly, the Board ofDirectors of the Company has, by resolution, given consent for not attaching the Balance Sheet, Statement of Profit andLoss and other documents of its subsidiaries in the Annual Report of the Company for the financial year ended 31stMarch, 2013.


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However, the Consolidated Financial Statements of the subsidiaries (prepared in accordance with Accounting Standard21 issued by the Institute of Chartered Accountants of India), form part of the Annual Report and are reflected in theConsolidated Accounts of the Company. In addition, the financial data of the subsidiaries have been furnished underNote No.38 to the Consolidated Financial Statements and forms part of this Annual Report.

The annual accounts of the subsidiaries and related detailed information will be kept at the Registered Office of theCompany, as also at the head offices of the respective subsidiary companies and will be available to investors seekinginformation at any time.

The consolidated financial results reflect the operations of the following subsidiaries: Metahelix Life Sciences Ltd.(consolidated with its wholly owned subsidiary Dhaanya Seeds Ltd.), Rallis Chemistry Exports Ltd. and Zero Waste AgroOrganics Pvt. Ltd.

DIRECTORS

Dr. K. P. Prabhakaran Nair will retire as Director of the Company at the conclusion of the forthcoming Annual GeneralMeeting. The Directors wish to place on record their appreciation of the valuable services rendered by Dr. Nair during histenure as Director of your Company.

In accordance with Article 112(2) of the Articles of Association of the Company, Mr. R. Mukundan, Dr. Yoginder K. Alaghand Mr. E. A. Kshirsagar retire and are eligible for re-appointment.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from theOperating Management, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that thereare no material departures;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied themconsistently, and made judgements and estimates that are reasonable and prudent, so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profit of the Company for thatperiod;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE AND INTERNAL AUDIT

The Internal Audit Department undertook a substantial number of internal audit reviews with a view to encompassing alarge coverage. This resulted in providing adequate assurance on compliance and sustenance in internal controls.

The Enterprise Risk Management framework, as well as control testing pertaining to the financial reporting for the CEO/CFO certification framework as required under Clause 49 of the Listing Agreements with the Stock Exchanges, was wellestablished.

A Report on Corporate Governance and the Management Discussion and Analysis Report, as required under Clause 49 ofthe Listing Agreement, forms part of the Annual Report.

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AUDITORS

At the Annual General Meeting, Members will be required to appoint Auditors for the current year. M/s. Deloitte Haskins& Sells, the existing Auditors have furnished a certificate, under Sections 224(1B) and 226 of the Companies Act, 1956,regarding their eligibility for re-appointment. The Members are requested to consider their re-appointment as Auditorsof the Company for the current year and authorize the Board of Directors to fix their remuneration.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956,M/s. N. I. Mehta and Co., Cost Accountants have been appointed to conduct Cost Audits relating to Insecticides (TechnicalGrade and Formulations) and Fertilizers of the Company.

By General Circular No. 8/2012 dated 10th May, 2012 issued by the Ministry of Corporate Affairs, Government of India, ithas been made mandatory for companies to file Cost Audit Reports from the Financial Year 2011-12 onwards in XBRL(Extensible Business Reporting Language) format. The due date for filing of the Cost Audit Reports for the financial year2011-12 was 28th February, 2013. The Company has filed the Reports with the Ministry of Corporate Affairs on 30thJanuary, 2013.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in theReport of Directors) Rules, 1988, the information relating to conservation of energy, technology absorption and foreignexchange earnings and outgo is annexed.

PARTICULARS OF EMPLOYEES

The information required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars ofEmployees) Rules, 1975 as amended, is provided in the Annexure forming part of the Report. In terms of Section 219(1)(b)(iv)of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholderinterested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None ofthe employees listed in the said Annexure is related to any Director of the Company.

ACKNOWLEDGEMENT

Your Directors wish to thank all the employees of the Company for their dedicated service during the year. They wouldalso like to place on record their appreciation for the continued co-operation and support received by the Companyduring the year from bankers, financial institutions, business partners and other stakeholders.

On behalf of the Board of Directors

R. GOPALAKRISHNANChairman

Mumbai, 25th April, 2013


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ANNEXURE TO THE DIRECTORS’ REPORT(Under Section 217(1)(e) of the Companies Act, 1956)

Disclosures

A. CONSERVATION OF ENERGY

(a) Energy Conservation Measures Taken:

The Company has continued its focus on conservation of energy resources and it has instilled this in its workingculture. Our focus is to conserve energy by eliminating wastages and improving efficiencies. This is taken intoconsideration right from design stage, procurement and installation of equipment/ appliances.

All business units continued their efforts to improve energy usage efficiency. Various key performance indicatorssuch as specific energy consumption (energy consumed per ton of production), specific energy costs weretracked to meet the Company’s objective of reducing specific carbon foot print. Innovative ways and newtechnologies were constantly explored to bring about alignment with National Action Plan on Climate Change.

During the year under review, focus was towards eliminating wastages by every consumer of energy. Usage ofVFDs (Variable Frequency Drive) for high powered motors and energy efficient pumps, agitators, Rotary valve,etc. helped in maintaining the power cost. To reduce power consumption, CFL, LED and solar powered lightswere also installed at most of the locations. Few reciprocating chilled water system and air compressors werereplaced with screw technology to save power.

These efforts have helped us in maintaining the purchased power cost and reducing the electricity generatedthrough own diesel generators, over the previous year. However, captive power produced using gas has goneup due to rise in gas price. The conservation programme implemented by the Company will continue to furtherconserve power and energy.

(b) Additional Investments and Proposals, if any, being implemented for reduction of Energy Consumption:

Proposals implemented/ under progress related to energy and fuel savings are part of energy audits and otherinitiatives such as DISHA (the Company’s Enterprise Value Creation Programme) and KKHD (Kisme Kitna HaiDum). This includes exploring installation of Briquette Boiler with Chilled water System, replacement ofreciprocating brine compressors with high efficiency brine screw compressors, high efficiency agitators, VFDcontrollers for compressors, LED based lighting & Solar lighting fixtures in the plant, thermography meter formechanical and electrical system. Such actions involved harnessing new ideas for improvement and investment,which gave adequate returns and secured the future energy needs of the Company. Capital investment proposalsfor modernization of the manufacturing plants for process improvement, capacity enhancement and automationalso add to energy savings, due to inbuilt increased efficiencies.

(c) Impact of the measures at (a) and (b) for reduction of Energy Consumption and consequent impact onthe Cost of Production:

Captive Power Plants and energy conservation measures taken across the manufacturing locations resulted inmore generation of power through internal resources. It also reduced dependency on external source andhelped to increase throughput of plants as per the need of the market.

(d) Total energy consumption and energy consumption per unit of production as per Form A:

FORM ‘A’

DISCLOSURE OF PARTICULARS WITH REGARD TO CONSERVATION OF ENERGY

(a) Power and Fuel Consumption2012-13 2011-12

1. Electricity(a) Purchased

Unit In Lacs of kwh 2,09.56 2,00.85Total amount ` Lacs 14,02.62 13,97.59Rate/ Unit `/ kwh 6.69 6.66

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(b) Own Generation throughDiesel generatorUnit In Lacs of kwh 5.54 3.60Unit per litre of Diesel oil Kwh/ Litre 2.89 2.05Total amount ` Lacs 67.28 68.27Cost/ Unit `/ kwh 12.14 24.12

(c) Own Generation through CPPUnit In Lacs of kwh 1,02.75 1,04.09Unit per M3 of Gas Kwh/ M3 3.55 3.53Total amount ` Lacs 9,70.92 8,15.26Cost/ Unit `/ kwh 9.45 7.83

2. Other Consumption(a) High Speed Diesel

Quantity Kl 20.84 17.41Total Cost ` Lacs 9.96 7.27Rate/ Unit `/ Litre 47.79 41.14

(b) Furnace OilQuantity Kl 1,589.06 1,249.39Total Amount ` Lacs 6,54.49 6,28.62Rate/ Unit `/ Litre 41.19 27.58

(c) Bio Fuel - BriquettesQuantity MT - 81.93Total Cost ` Lacs - 4.01Rate/ Unit `/ Kg - 4.89

(d) GasQuantity M3 50,53,570.00 52,74,359.68Total Cost ` Lacs 14,59.65 12,47.27Rate/ M3

` 28.88 23.65

(b) Consumption per unit of production

Focused drives at all Units contributed to sustained energy consumption per unit of production, compared tothat in the previous year. However, an increase in cost was observed because of steep increase in fuel costs.

B. TECHNOLOGY ABSORPTION

FORM ‘B’

Research and Development (R & D)

1. Specific areas in which R & D is carried out by the Company:

The Company’s Research and Development efforts aim to deliver increasing value to the farming community.Towards this, the Research and Development Centre focuses on developing new and safer formulations forbetter efficacy, greener products that are environmentally safe, as also affordable for the farmer.

Product Development of new formulations is undertaken in the areas of Crop Protection, Plant Growth Promoters(PGPs) and Plant Growth Nutrients (PGNs). A number of registration dossiers have been submitted during theyear for supporting domestic and international business.

2. Benefits derived as a result of above R & D:

(i) Fourteen products were registered in the international market.

(ii) Two products were registered in India for the domestic/ export markets.

(iii) Two new products namely, Tata Uphaar (Plant Growth Promoter) and Gluco Beta (Plant Growth Nutrient)were commercialized during 2012-13. Tata Uphaar (RDS) is an advanced formulation that improves crop

2012-13 2011-12


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vigour, has a greening effect, higher flower retention, better fruit setting, improved quality and higher yield.Gluco Beta is an organic nutrient supplement to minimize the multi nutrient deficiency and helps inincreasing the yield. Gluco Beta is suitable for all crops, but will be highly responsive in cereal crops like riceand wheat.

3. Future Plan of Action:

The Company’s initiative of New Product Development (NPD) process has identified several new products to bedeveloped over the next 10 years. Several products are at various stages of development. Improvement plansfor existing products are also underway with an objective of cost reduction and being competitive in themarket. Process Development for contract manufacturing opportunities is also undertaken.

4. Expenditure on R & D:` Crores

2012-13 2011-12Capital expenditure 14.64 0.05Revenue expenditure * 8.92 8.99

23.56 9.04

Total R&D expenditure as a percentage of net sales 1.80% 0.78%

* includes an amount of `4.23 Crores (Previous Year `5.83 Crores) paid to external agencies.

During the year, the Company has also incurred an expenditure of `9.20 Crores (Previous year `4.71 Crores)towards product development and registration, which is included under Capital Work In Progress (CWIP). Totalamount included in CWIP is `10.94 Crores (Previous Year `16.39 Crores).

5. Technology Absorption, Adaptation and Innovation:

(a) Continued process improvements and improved formulation types/ strengths will result in improving theefficacy, productivity and profitability of the Company.

(b) Some compounds from the NMITLI (New Millennium Indian Technology Leadership Initiative) project haveshown bioactivity on basis of field trial results. An International Patent has been taken on these initiatives.Further work is now planned.

(c) Special focus has been given to develop safer formulations like controlled release, solvent to non-solventbased like WG, SC, Granules, etc.

(d) Recommendations were obtained from State Agricultural University/ Indian Council of Agricultural Researchfor six products on different crops for inclusion in the Package of Practices. This will help in participating inGovernment subsidy business.

(e) The Innovation Turnover Index (revenues from products newly introduced in the last four years to totalturnover) was around 15%.

(f ) There is no import of technology during the last 5 years.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Total Foreign Exchange used and earned

` Crores

2012-13 2011-12

1. Foreign Exchange Earned 419.83 387.362. Outgo of Foreign Exchange 409.07 358.68

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MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY SCENARIO AND RALLIS’ GROWTH STRATEGY

Industry Structure:

Agriculture production capability has to cope up with the ever-growing world population. Based on evidences, in 1900there were 1.6 Billion people on the planet; in 1992 this had risen to 5.25 billion and by the year 2050 it may reachover 9 billion1. This increase in world population is mostly in developing countries, where the need for food is the gravestand starvation threatens human life.

Civilization has been combating weeds, insects, diseases and other pests throughout history. Agrochemicals which canbe classified into three major categories, namely Insecticides, Fungicides and Herbicides, are an unavoidable part ofmodern life, used to protect everything from flower gardens to agricultural crops from specific pests. As per FAO reports,without agrochemicals, food production would decline, many fruits and vegetables would be in short supply and priceswould rise. Some 20 to 40 percent of the world’s potential crop production is already lost annually because of the effectsof weeds, pests and diseases2. As per research estimates, in India annual crop losses on account of poor and inadequateuse of crop protection chemicals exceed `100,000 Crores3.

Continuous innovation has led to development of crop protection products with lower usage rates and better degradability,leading to lower environmental loading, improved human safety profile for farmers, workers and consumers, high biologicalefficacy, selective control of target pests and increased safety to specific beneficiaries, naturally occurring insects andorganisms.

World Agrochemical Market:

The global crop protection industry has registered a growth of 6% p.a. since 2005 to reach USD 47.3 Billion in 2012. Thismarket is expected to grow further, owing to the increasing food, fiber and fuel needs, at 4% p.a. to reach USD 54 Billionin 20154.

The crop protection chemicals market is mainly concentrated in the major developed countries such as United Statesand Western European nations. Europe has the largest share in the agrochemical market followed by Asia, Latin Americaand North America4.

Herbicides are the most widely used agrochemical products globally, followed by insecticides and fungicides. Fungicideis the highest growing segment as it helps increasing yield, improving quality and in seed treatment. Fungicides are usedin almost all agriculture markets of the world due to favorable climatic conditions for the fungal growth. Herbicides areused in most of the regions of the world, though the major markets are North America and Europe due to favorableclimatic conditions there. Insecticides are more prevalent in Asian countries. This is due to higher growth of cotton, cereal,fruits and vegetables, which have higher incidence of insect attacks4.

Indian Crop Protection Market:

India accounts for approx 4% of the global agro chemicals market estimated at USD 1.8 Billion. With the introduction ofnewer molecules and the increasing awareness among farmer community, the industry is witnessing high growth ratesin recent times. The crop protection industry in India is dominated by molecules which are off-patent. Hence, a strongdistribution network and brand presence acts as a competitive advantage5.


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As per published reports, consumption of crop protection products in India is among the lowest in the world. Per capitaconsumption of crop protection products in India is 0.6 kg/ ha compared to 13 kg/ ha in China and 7 kg/ ha in USA. Someof the reasons for low consumption in India are low purchasing power of farmers, lack of awareness among farmers,limited reach and lower accessibility of products5. This presents an immense opportunity for the crop protection industryto grow in India.

Market Trends:

o Increasing focus on development and production of environmentally safe pesticides by the industry as well as theGovernment.

o Focus by larger companies on brand building by conducting awareness camps for farmers and providing completesolutions.

o Increase in strategic alliances among large players for greater market reach and acquisitions of smaller domesticcompanies by global players to penetrate growing Indian market.

o Emphasis is on yield and quality output by the farmers. With increasing disposable income, farmers are willing tospend more to gain high yield and quality output. Preference for high quality products is on the rise.

o Usage of herbicides and fungicides is on the rise due to increased awareness, unavailability of labour and increasedfocus on fruits and vegetables.

Non-Pesticide Portfolio:

With an increase in the disposable income, Indian agriculture has three needs viz. increase production, increase productivityand increase quality of produce. All these needs can be addressed by use of modern agricultural practices which includeSeeds, PGN and Agri-services.

Plant Growth Nutrients (PGN)

All the twenty-one nutrients required by the plant, including Macronutrients, Micronutrients and Secondary Nutrientsmust be balanced so that the plant maintains good health to defend unfavorable environmental conditions. Indiscreetagriculture practices in many parts of the country have led to increasing removal of secondary and micronutrients fromthe soil and multiple nutrient deficiencies, which are becoming a major constraint to increasing production.

A significant drop in the yield and quality of crops in the country has brought into focus the need for promotingbalanced use of fertilization and educating the Indian farmer about the deficiencies of secondary and micronutrients inthe soil.

Your Company has introduced a range of Specialty Nutrient products and to address sustainable agriculture, is focusedon greener and cleaner products. These products not only will act as a vehicle for building relationship in fast growingfruits and vegetables, but also facilitate catering to small and marginal farmers. The current Indian market of PlantGrowth Nutrients and specialty fertilizers is estimated to be `1,800 Crores6.

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Seeds

Seed is the basic and most critical input for sustainable agriculture. The response of all other inputs depends on thequality of seeds to a large extent. The global market for seeds for the year 2012-13 has been USD 37.5 Billion growing ata CAGR of 8% for last 10 years. Indian seed industry has grown at the rate of 15% over the last five years and is estimatedto be USD 1.6 Billion for the year 2012-137.

Soil Conditioner

Health of the soil is very important for optimizing crop production as also for good health of people and animalsconsuming farm produce. Soil conditioners are used to improve poor soils and to rebuild soil structure to improve theplant capacity to absorb water and nutrients from the soil. A wide variety of products are used as soil conditioners, suchas bone meal, compost, farm yard manure, etc. There is a big need for soil conditioners of good quality which are organicin nature.

Agri Services

With the changing technologies and improved solutions available, the farming community is increasingly looking forservices to support them in farm activities. The Government has also recognized this and provided for incentives foragricultural extension services. These will include educating farmers on right usages of crop protection products, seeds,PGN and propagate good agricultural practices.

Rallis Response:

Your Company launched Rallis Poised growth agenda in May 2007, targeting a sustained profitable and balanced growth.Since the launch of Rallis Poised growth agenda, your Company has recorded 16% CAGR in gross revenues. The RallisPoised growth agenda has seven growth drivers, viz. Contract Manufacturing, Brand Premium, Value Enhancement (knownas “DISHA” initiative), Overseas market expansion (named “Apollo”), Agri Services, Sustainability and Accelerating Growth.This is supported by three enablers, viz. Process orientation, infrastructure support in manufacturing Units, fields andoffices and a committed and competent team of engaged employees.

Initiatives such as acquisition of a stake in Metahelix Life Sciences in December 2010, setting up a new manufacturingfacility at Dahej in Gujarat, operating since June 2011, grow More Pulses programme, Samrudh Krishi, TRAITS and initiativesof current year including the acquisition of a stake in Zero Waste Agro Organics and investment at new R&D facility RICHat Bengaluru has further strengthened the Rallis Poised growth agenda. These initiatives are not only to drive growth butalso towards balancing its business portfolio by focusing on its core business of crop protection as well as non-pesticideportfolio of Seeds, PGN, Agri Services, Contract Manufacturing, etc.

Business Environment 2012-13:

The global crop protection market for the year 2012 was up 6.4% over 2011. While all regions showed good level ofgrowth over the previous year, the strongest growth was seen in Latin America on account of strong crop prices andincrease in demand for maize, soybean and sugarcane.

The Indian Crop Protection industry is estimated to have recorded low growth for 2012-13. The Kharif season wasdelayed by over three weeks in western, central and the south central part of India. Cotton and paddy sowing were


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severely impacted in these areas leading to change in the usage pattern of the crop protection molecules. Paddy inAndhra Pradesh during harvesting was impacted by Neelam Cyclone. Rabi was characterized by low pest and diseaseoccurrence in key crops, especially paddy and pulses. Area under pulses, wheat and soya was higher than last year, butthere was a drop in the acreage of cotton, paddy and coarse cereals. Overall, the year was challenging for the industry inIndia with inventory and margin pressures.

RALLIS’ OVERALL PERFORMANCE

Consolidated Results:

Your Company’s gross sales for the year 2012-13 crossed the key milestone of `1,500 Crores, reflecting a growth of 16%over the previous year. The Company’s profit before tax during the year at `172.29 Crores, grew by 15%. Net profit afterminority interest rose 20% to `119.01 Crores.

Standalone Results:

The gross sales for the year 2012-13 were `1,401.14 Crores, a 13% rise over the previous year. Profit before tax was higherby 15% at `173.35 Crores while net profit for the year stood at `119.38 Crores, recording a growth of 18% over theprevious year.

REVIEW OF OPERATIONS

(1) Crop Protection:

(a) Domestic Formulations Branded Business:

The Domestic Branded Business of the Company registered a growth of 8% during the current year, driven by asustained performance of the key brands. During the year the Company intensified activities under its marketexpansion programme EAGLE (Expansion and Aggressive Growth through Leadership and Excellence). Thelatest brand recall survey carried out by an independent agency has reported an improvement in the brandrecall among farmers, with seven out of top ten brands being that of Rallis.

Your Company continued to strengthen its long standing relationship with the Indian farmers through thefarmer relationship building platform RKK - Rallis Kisan Kutumba. RKK touched a new milestone during the yearwith the farmer base crossing a million farmers. RKK is a unique initiative, enabling farmers to imbibe and useknowledge and share the same across the farmer community to increase productivity. The key activities withthe RKK farmers are regular contacts throughout the crop cycle, organizing crop seminars, productdemonstrations, Farmer exchange programmes (Prerna), Focused Group Discussions (FGDs) and Advisory services.Your Company has added more value added services such as sms alerts on crop prices, weather and possibledisease outbreak through Samrudh Krishi programme. Farmer helpline call centres have been strengthened andhave become an important tool in servicing the farmers. Rallis currently offers helplines in fifteen vernacularlanguages.

TATA Rallis brand stands for reliability and trust in the minds of the Indian Farmers. We pride on this relationshipbeing a major strength of Rallis. The core strength in Rallis is to build sustainable brands. Old Brands such asRogor (currently Tafgor), Asataf and Contaf which were established by Rallis many years ago, continue to find a

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place in the minds of the farmers and are ruling strong and the new brands such as Applaud, Ergon, Takumi andRalligold are steadily rising in brand equity and finding their leading place in the industry. The Company adoptsseveral marketing methods to build brands, such as -

o Systematic product segmentation, such as megabrands approach and various focused campaigns to buildawareness wherein the entire sales force is engaged in contacting and educating the farmer and creatingawareness.

o 4 S campaigns – a distinctive approach where farmers across the country are contacted at regular intervalsby a cross functional team from Rallis to create greater customer centricity across the Company. The fourstages in the campaign are to contact the farmer (Sampark), build a relationship (Sambandh), create higherproductivity (Samrudhi) and ensure customer delight (Santushti).

o Innovative bouquet of activities like crop seminars, field demonstrations, Prerna programmes, AdvisoryCenters, quizzes are part of the activities conducted on a regular basis.

(b) International Business:

The International Business Division showed consistent performance during the year, with a growth of 9% overthe previous year. The Company’s strategy is towards maintaining a good share of international business of itstotal revenue pie and this stood at above 30%.

The increase in revenues over the previous year was led by Contract Manufacturing and alliance based sales inLatin America, a key market for crop protection. The last quarter of 2012-13 also saw an additional contractgained for a new Active Ingredient product for the US market. South East Asia and Africa continued to grow onaccount of new registrations received for key products.

(2) Non-Pesticide Portfolio

(a) Seeds:

After acquiring a majority stake in Metahelix Life Sciences, a research-led Seeds Company in December 2010,this year the Company focused its efforts on establishing seed brands in various segments. The high potentialsegments along with geographies were identified and suitable products were selected based on the competitiveenvironment analysis. During the year, extensive field activities were conducted to establish the new brands.

(b) Plant Growth Nutrients:

As a move towards sustainable agriculture, your Company is increasing its focus on greener and cleaner products.Tata Uphaar, a 100% organic growth promoter and Gluco Beta, a unique blend of carbon, proteins, primarynutrients (N and K), secondary nutrients (Ca and Mg) and micro nutrients (Zn, Fe and B) in organic form is amove in that direction. Ralligold, a Plant Growth Nutrient, which partially reduces fertilizer consumption byenabling crops to better utilize the applied phosphorus, will not only help the famer increase his income, butwill also help in arresting soil deterioration due to imbalanced use of chemical fertilizers.

(c) Agri Services:

Initiatives such as the Samrudh Krishi services started by the Company at Nasik for grape farmers and atGujarat for cumin farmers have received an encouraging response from the farmers. Grow More Pulses (MoPu)


26

RALLIS


programme of the Company, where the Company is actively engaged with the farmers in increasing theproductivity of pulses, and also helping them in marketing the produce, aims at embracing the entire valuechain of products and services in growing pulses.

MoPu:

Pulses Productivity programme of Rallis has received acclaim from Maharashtra Government, during a recentWorld Economic Forum organized meeting. Under this initiative 1,60,000 farmers were covered during the year,supporting them to improve crop productivity and returns. The Public Private Partnership Project (PPP) betweenMaharashtra Government and Rallis, for Pulses, was executed, guiding the farmers deploying the Rallis Packageof Practices. The other States where MoPu continued were Karnataka and Tamilnadu and during the year it wasalso extended to Madhya Pradesh.

Samrudh Krishi:

Farmer advisory services deployed in grapes, chilli and cumin crops has completed full year of operations. Thefarmers have reported reduction in input costs, improved yields, and better quality of produce which resulted inbetter prices, following Rallis’ advisory support. In grapes, the share of exportable produce went up, giving thefarmers better netbacks. Advisory services for chilli crop was launched during the year in Andhra Pradesh andthe results are encouraging. Your Company has also piloted SK activities for paddy in Odisha.

Tata Rallis Agri Inputs Training Scheme (TRAITS):

In order to build necessary field force competencies your Company had launched TRAITS initiative in 2011-12whereby non-graduate, rural youths with a farming background were trained in Agri-marketing and crop advisoryactivities. Two new centers for TRAITS have been opened at Bhubaneswar in Odisha and Nalanda in Biharduring the year.

ZWAOPL: Soil Conditioner : organic compost business:

After the acquisition of stake in Zero Waste Agro Organics Private Limited (ZWAOPL), your Company hasintroduced the product GeoGreen, a scientifically prepared organic compost for key cash crops such as grapes,banana, vegetables, pomegranates, sugarcane, arecanut, ginger, potato and apple and the product is well acceptedby the farmers.

TOTAL SHAREHOLDER RETURN

Total Shareholder Return (TSR), is the yearly rate of return of an investment made considering capital appreciation plusdividends over time. The TSR of an investment made in your Company in March 2004 kept till the last trading day ofMarch 2013 works out to be quite attractive at 47% per annum. This means that if one had invested `100 in Rallis’ stockin March 2004, the total value that the investment would have earned would be `2,537, if one had sold the stock on thelast trading day of March 2013.

The dividend payout of the Company has improved over the years, from `1/- per share in 2005 (on Equity Shares of`10/- each) to `2.20 per share in 2012 (on Equity Shares of `1/- each). Along with the recommended final dividend of`1.30 per share, the dividend payout of the Company in 2013 will be `2.30 per share.

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Rallis’ stock price has significantly out-performed the BSE Sensex during the past 10 years. If both the Rallis stock priceand Sensex were indexed to 100 as on the last trading day of March 2004, the y-o-y performance of the Rallis stock andSensex till FY 2013 is shown in the chart.

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Rallis Share Price 71 233 330 248 335 392 1,255 1,321 121 115

Sensex 5,591 6,493 11,280 13,072 15,644 9,709 17,528 19,445 17,404 18,836

0

900

1800

2700

3600

FY 2013FY 2012FY 2011FY 2010FY 2009FY 2008FY 2007FY 2006FY 2005FY 2004

The Performance of the Company’s Stock Price vis-a-vis Sensex(As of last trading day of March )

SENSEX

2,439

337

RALLIS SHARE PRICE

Ind

ex

OPPORTUNITIES AND OUTLOOK

The fundamentals of the Agriculture sector continue to be robust and will drive growth in the years to come. Theremunerative produce prices for most of the key crops are expected to continue and will lead to increased investmentsby the farmers on agri inputs and improving overall productivity.

The enterprise value creation programme, DISHA (Drive Innovative Solutions with Hyper Achievements) which aims atre-engineering various processes and activities across the Company to generate value and the International Businessgrowth programme, APOLLO are also expected to contribute well to the overall growth agenda of the Organization inthe coming year as well.

The EAGLE (Expansion & Aggressive Growth through Leadership & Excellence) initiative will continue to assist the businessto achieve its targets for 2013-14.

RISKS, CONCERNS AND THREATS

The performance of the crop protection industry and other agri inputs is dependent on monsoons, pest and diseaseincidences on crops. Major fluctuations in total rainfall and its distribution affect the crop acreages and overall productivityand have a direct correlation with sales. Farmers’ willingness and ability to spend will be an important driver to demandgeneration. Strong support produce prices and better availability of credit will ease the pressure on the farming community.Tightening regulations can be looked upon as an opportunity by committed enterprises.


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Exchange rate fluctuations between Dollar and Rupee could also impact revenues as well as costs in the foreseeablefuture. The rising crude prices could have an impact on the costs and prices of various products.

RESEARCH & DEVELOPMENT (R&D)

A major highlight has been the setting up of RICH (Rallis Innovation Chemistry Hub) in Bengaluru during the year. RICH isa state of the art R & D centre, comprising Chemistry, Product Development and Registration Departments. The ChemistryDepartment further comprises Process Chemistry and Development, Formulation Development and Analytical Researchsections. Bioscience laboratories have also been set up for quick evaluation of new products.

The Company’s Research and Development efforts are focused on new and safer formulations for better efficacy, improvedvalue and services to the farmers. A number of registration dossiers have been submitted during the year for supportingdomestic and international business.

Process Chemistry and Development focused on developing cost effective processes for molecules that are off-patent, inthe areas of crop protection and having relevant market potential. Six patents were filed during the last year. Some ofthese are also being filed for world patents in relevant areas of interest. Process improvement projects were undertakenfor improving product quality, yields and productivity of manufacturing processes. Process developments for contractmanufacturing opportunities were also taken up as a major activity. Environment, Health and Safety (EHS) considerationswere given special emphasis.

Product Development of new formulations in areas of Crop Protection, PGP/ PGR, Micronutrients was also undertakenwith help of field trials in different areas, so as to assess their bio efficacy, effective dose and ensuring that theseformulations are safe to use.

ENVIRONMENT, HEALTH & SAFETY (EHS)

During the year 2012-13, your Company has been awarded use of the Responsible Care Logo by Indian Chemical Council(ICC). This is testimony to the strong Environment, Health & Safety systems in the Company, which go beyond statutorynorms. This recognition has an international recognition and there are only sixteen chemical companies in India whohave received this recognition so far.

As in previous years, the Company has “Zero lost time accident at the workplace” as its long term strategic goal. Barringone minor fire incident, there were no reportable accidents during the year, with more than 80% reduction in Frequencyrate of Non reportable (medical/ minor/ first aid) accidents. There were no occupational health illness cases or majoremergencies across the Organization. This has been achieved with commitment from senior leadership and supportedby all levels of workforce across the Organization. Behavior Based Safety training & observations, Emergency Responsetraining, RC Management system, Quantitative Risk Assessment, near miss identification & analysis and contractor safetywere the key focus areas, among many others, during the year.

Since the Company’s new plant at Dahej has been developed as a model in EHS systems, the same are now beingdeployed in other Units, including QRA, Risk Assessment, Layer of Protection Analysis (LOPA), Process Safety Management,Visual management, pre-startup reviews and rigorous training to employees and contract workers since inception.

Utility management and energy conservation initiatives continued to be focus area in all manufacturing Units. This hashelped in improving the “Greening Index” of the Company.

All Units of the Company are certified for IMS (Integrated Management System) which includes ISO-9001, OHSAS-18001and ISO-14001 and are maintaining the standards with regular review at various levels and aligning the system with theCompany’s Enterprise Process Management. The new plant at Dahej is recommended for IMS certification by DNV whichincludes ISO-9001, ISO-14001, OHSAS-18001 and ISO-50001 (Energy Management system).

Product stewardship, transportation and warehouse safety continued to be strengthened by providing resources,standardization to match benchmark practices, training to drivers and warehouse workers for safe transportation, storageand loading/ unloading and emergency plan for road accidents.

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The Company’s efforts and performance in the area of EHS have been recognized across the manufacturing Units,through receipt of several awards. These awards include:

o Responsible Care Logo by ICC

o NSC Maharashtra Chapter Award for Akola Unit

o Two Awards for Dahej Unit in Green Environment Contest by Baroda Productivity Council:

• Category : Food, Agro & Pharma - Winner

• Overall winner in Safety Vertical - Winner

INTERNAL CONTROLS SYSTEMS AND ADEQUACY

The Company’s internal audit systems are geared towards ensuring adequate internal controls to meet the size andneeds of business, for safeguarding the assets of the Company, evaluating reliability of financial and operational information,identifying weaknesses and areas of improvement and to meet with all compliances.

The risk based annual internal audit programme focuses primarily on such system and process checks and controls,monitoring compliances and continuous upgrade of controls.

This process enables reporting of significant audit observations to the Audit Committee. The Audit Committee reviewsthe audit observations and monitors the implementation through action taken reports. Suggesting value add ideas isalso one of the key focus areas.

The scope and authority of the Corporate Audit Department is derived from the Audit Charter approved by the AuditCommittee. Internal Audit reviews are performed by an in-house team of multi-disciplinary professionals comprisingchartered accountants, CISA and a technical resource.

Additionally, the departmental performance is rated through feedback obtained from process/ function owners/ auditeesto gauge and assess the effectiveness of the internal audit process and use it as an improvement mechanism.

The development and use of e-platform will continue to be a prime initiative in the current year, with the objective ofcovering a larger volume of audit data to provide a more meaningful assurance in addition to the regular reviews, thusraising the bar of control effectiveness.

RISK MANAGEMENT

Risk management includes implementing systems to identify risks, report them and take measures to mitigate them. TheCompany has laid down procedures to inform the Audit Committee of the Board of Directors about risk assessment andminimisation procedures.

This risk management process covers risk identification, assessment, analysis and mitigation, along with providing necessaryupdates to the Audit Committee of Directors and to the Board of Directors. The risk structure comprises risk owners, whodefine the mitigation plans for all categories of risks including responsibilities and timelines and the activity owners whoare responsible for taking action on the risk mitigation plans.

During the year, the key business risks of the Company covering all the functions were updated. Currently, there is arepository of 11 key risks which are evaluated based on the probability and impact of each risk.

Further, the major risks forming part of Enterprise Risk Management are linked to the audit universe and are covered aspart of annual risk based audit plan.

The overall objective of this process is directed towards optimum utilization of the resources of the Company and topromote and enhance the stakeholders’ value.


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HUMAN RESOURCES

The Company, in its journey to enhance the efficiency and effectiveness of its Human Resources, undertook severalinitiatives during the year to improve sourcing of talent, enriching the talent, ensuring better employee satisfaction,talent retention and skills development. The Company revisited some of the employee policies and revised them to keepthem in line with the changing scenario. Manpower appropriation studies were carried out at Ankleshwar and Dahejfactories. The reports are being studied for implementation.

The Company carried out an Internal Customer Satisfaction Survey to look for opportunities to enhance the satisfactionof internal customers. The satisfaction scores have improved over last year.

Alignment of goals of the entire Organization was carried out through the deployment of Strategy Deployment Matrix(SDM) and Balanced Scorecard (BSC).

During the year, the Company has organized training programmes for all categories of employees. Customized trainingwas provided in various areas, including functional, behavioral, Business Excellence, Customer orientation, Safety, Code ofEthics, Climate Change, Product Training, competency assessment. Company specific Leadership Development TrainingProgrammes were also undertaken as a part of the overall plan to create a pipeline of future Leaders. A new web basede-learning initiative called ‘eVidya’ was launched in collaboration with Harvard Business Publishing and Tata ManagementTraining Center. Employees can complete the training modules from any place and at any time on this e-learning portal.

This year, the Company participated in Employee Engagement Survey conducted by Aon Hewitt. Employee EngagementScore for Rallis is 80%, which is higher than the Average Score for Manufacturing Industries and Aon Hewitt Best EmployerIndia score. This year, the Company also participated in a survey conducted by ‘Great Place to Work Institute’. The score is82%, which is equal to the average of top 50 companies which participated in the survey this year.

As on 31st March, 2013, the employee strength was 843, as compared to 857 as on 31st March, 2012.

BUSINESS EXCELLENCE

The year 2012-13 was an eventful year for Rallis. Your Company was declared the winner of the CII-EXIM Bank Prize at theNational Quality Summit of CII (Confederation of Indian Industry) held in Bengaluru on 2nd November, 2012. This honouris given to the Organization that exhibits highest standards of excellence based on the CII-EXIM Bank Business ExcellenceModel which is adapted from EFQM (European Foundation for Quality Management) model. This Prize, following thecoveted JRDQV Award of Tata Business Excellence Model won by the Company during 2011, is a cause for celebration,while also placing the onus on the Company to continue on the journey of excellence for a better and sustained growth.

These coveted Awards acknowledge the sustained efforts and strong commitment of all employees of the Company toexcel, sustain and grow together. Winning the JRD QV Award and the CII-EXIM Bank Prize has energized the Organizationto continue on the Business Excellence (BE) path with renewed vigour.

Some highlights of the Business Excellence journey this year are:

o Six entries from the Company qualified for Tata Innovista Regional Network Forum, with four of them winning theregional rounds. One project - “The Product P – A Customer’s Delight” achieved the Global Recognition in the “Dareto Try” category.

o One project - “EAGLE” got accolades at the QIMPRO Convention on Innovation.

o LASER (Learn, Apply, Share, Enjoy & Reflect) drive continued in all factories. Significant changes in the workplaceconditions were achieved through implementation of 5S.

o More than 300 employees participated in training programmes on “Practicing Business Excellence” (PBE).

INFORMATION TECHNOLOGY

In line with its overall growth objective, your Company continues to invest significantly in Information Technology (IT),with a view to leverage it for optimum business value.

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Considerable progress has been made with regard to the utilization of ERP (Enterprise Resource Planning) and BIW(Business Intelligence Warehouse) systems from SAP. This has helped the Company in aligning of new business segmentsand simplification of business processes, particularly in the areas of logistics management comprising sales distributionand materials management, along with production planning and financial control; to improve agility and customerservice. BIW continues to provide analytical reports and key business MIS at the right time through the system.

Investments are being continuously made in IT infrastructure to support business applications. A robust virtual privatenetwork using MPLS technology is in place. Your Company continues to leverage the growing telecom network in thecountry to provide high bandwidth terrestrial links to all its operating Units. This has enabled effective coordination ofactivities across geographically dispersed locations. It has also implemented video conferencing facilities at six of itsmajor offices to have instant meetings, reduce travelling time and costs and improve the quality of communication whilelowering the Company’s carbon footprint. Furthermore, to handle e-waste in a proper manner, your Company has chosenGovernment approved vendors who specialize in disposal of e-waste in an environment friendly manner.

‘Tarang’ – The intranet for Company employees is a strong medium for knowledge sharing and employee self-service.New functionalities have been added to enrich the knowledge sharing experience.

This year, your Company has also implemented “eBandhan’’, the dealer portal for better dealer connect and onlineinteraction with dealers.

Information Security and reliable disaster recovery management is a critical focus area, especially as most of our businessprocesses become fully IT-enabled. Your Company has an active Disaster Recovery facility in a different seismic zone toensure business continuity in case of a disaster.

CORPORATE SUSTAINABILITY

Your Company believes that sustainable business is founded on Corporate Governance (business principles), with triplebottom line i.e. economic, environmental and social performance together creating sustainable value for all stakeholdersthrough business processes and continued growth. Business risk assessment with appropriate risk mitigation plans in fullcompliance ensures protection from internal and external business hazards. The key focus area in sustainability are watermanagement (recycling, reusing and conservation), water shed projects for community, carbon foot printing and reductionof specific CO2 generation, enhanced safety for all employees and associates. The Company is also planning to userenewable source of energy in steam and power generation in different Units.

Being a signatory to Global Compact Principles, the Company files a Communication on Progress (COP) to the GlobalCompact Society every year on the Company’s efforts in protecting human rights and promoting the conservation ofenvironment.

As a part of its commitment towards climate change initiatives, your Company has started monitoring a “Greening Index”consisting of carbon footprint, greening the premises, reduction in hazardous waste & solvent losses and waterconservation. As a part of greening the product initiative, the Company has already phased out its red triangle (Extremelytoxic) products and is giving emphasis to green triangle (Slightly toxic) products. In line with this, the Company isconstantly increasing the greening index of its product portfolio.

Participatory Sustainable Development is an integral part of the Company’s Community Development Policy, whichfocuses on involvement of all in the community development process. Your Company believes in care and concern for allpeople and is committed to improve the quality of life of every member of the community, especially the underprivileged.

The Company’s Community development efforts have resulted in expanding the community base to over 1,416 eventsand benefitting over 48,000 people.

The Key Themes inspiring CD (Community Development) initiatives as per the CD Policy are Leveraging competence inthe field of agriculture, Improving quality of life through water conservation and Empowering women & children. Thefoundation of these key themes is Volunteering by enthusiastic employees of Rallis.


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The focused initiatives under these Key themes, which are carried out by Rallis’ Employee Volunteers Saathis are:

o Leveraging Competency in Agriculture

o Improve Quality of Life through water conservation

o Women empowerment (TARA initiative)

o Children empowerment

Rallis CD initiatives have created positive impact on the community and at the end of our various programmes, communitieshave shared their positive feedback. Some of the impacts of above initiatives are:

o Awareness related to safety precautions to be taken while handling pesticides.

o Enhanced employability, improvement in agri output and generating rural employment.

o Increase in green belt.

o Increase in ground water level.

o Increase in confidence level of students.

o Clear understanding on various career options available, along with their potential.

o Women motivated to start their own business and be financially independent.

o Increase in self confidence and self image of girls and women.

Besides these CD initiatives, your Company also focuses on working towards upliftment of SC/ ST communities throughits Affirmative Action (AA) initiatives. Of the four themes under AA initiatives, viz: Employment, Employability,Entrepreneurship and Education, your Company focuses on Employment and Employability, along with working in theother two areas.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectationsmay be “forward- looking statements” within the meaning of applicable securities laws and regulations. Actual results coulddiffer materially from those expressed or implied. Important factors that could make a difference to the Company’s operationsinclude climatic conditions, economic conditions affecting demand/ supply and price conditions in the domestic and overseasmarkets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidentalfactors.

1. http://www.census.gov/population/international/data/idb/worldpopgraph.php

2. http://www.fao.org/fileadmin/templates/wsfs/docs/expert_paper/How_to_Feed_the_World_in_2050.pdf

3. Estimated by the Standing Committee on Petroleum and Chemicals 2011-12.

4. The Global Agrochemical and Seed Markets Industry Developments Phillips McDougall Ltd

5. Conference on Agro chemicals 2011 - Dept of Chemicals & Petrochemicals Govt of India and FICCI

6. Independent market research agencies

7. http://seednet.gov.in/Material/Structure.pdf

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REPORT ON CORPORATE GOVERNANCE1. COMPANY’S PHILOSOPHY ON THE CODE OF GOVERNANCE

Effective Corporate Governance practices constitute a strong foundation on which successful commercial enterprisesare built to last. It is essentially a system by which companies are directed and controlled by the management in thebest interest of all stakeholders. In a strict sense, Governance is the application of best management practices,compliance of laws, rules, regulations and adherence to ethical principles in all its dealings, to achieve the objects ofthe Company, enhance stakeholder value and discharge its social responsibility. Your Company recognizes thatstrong Corporate Governance is indispensable to resilient and vibrant capital markets and is, therefore, an importantinstrument of investor protection. It, therefore, continues to remain committed to a corporate culture of conscience,integrity, fairness, transparency, accountability and responsibility for efficient and ethical conduct of its business.

As a Tata Enterprise, your Company has a strong legacy of fair, transparent and ethical governance practices. TheCompany has adopted the Tata Code of Conduct for its employees, including the Managing Director. The Companyhas also adopted a Code of Conduct for its Non-Executive Directors. The Company’s corporate governance philosophyis also strengthened through adoption of the Tata Code of Conduct for Prevention of Insider Trading and the TataBusiness Excellence Model. The Company has also adopted a Whistle Blower Policy to provide a mechanism toenable the employees to approach the Audit Committee of the Board of Directors while reporting the instances ofunethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics policy, whichmay come to their knowledge.

Your Company has complied with the guidelines on Corporate Governance stipulated in Clause 49 of the ListingAgreements executed with the Stock Exchanges, the disclosure requirements of which are given below:

2. BOARD OF DIRECTORS

Composition

The Board of Directors, along with its Committees, provides leadership and guidance to the management anddirects and supervises the performance of the Company, thereby enhancing stakeholder value. The Board has afiduciary relationship in ensuring that the rights of all stakeholders are protected.

The Board of Directors, as on 31.03.2013, comprised 11 Directors, of which 10 were Non-Executive Directors. TheCompany has a non-executive Chairman and the 6 Independent Directors as on 31.03.2013, comprised more thanone-half of the total number of Directors.

None of the Directors on the Board is a Member of more than 10 Committees and Chairman of more than 5Committees (Committees being Audit Committee and Shareholders’/ Investors’ Grievance Committee, as per Clause49 I (C) (ii) of the Listing Agreement), across all the companies in which he is a Director. The necessary disclosuresregarding committee positions have been made by all the Directors. None of the Directors hold office in more than15 companies.

Category and Attendance of Directors

The names and categories of Directors, their attendance at the Board Meetings held during the year and at the lastAnnual General Meeting, as also the number of Directorships and Committee positions held by them in publiclimited companies are given below:

Director Category No. of Board Attendance at No. of Directorships* No. of committee positions inMeetings AGM held on (As on 31.03.2013) Mandatory Committees*

attended during 27th June, 2012 (As on 31.03.2013)2012-13

Chairman Member Total Chairman Member Total

Mr. R. Gopalakrishnan Non-Independent 6 Yes 5 7 12 - 3 3(Chairman) Non-Executive

Mr. Homi R. Khusrokhan Non-Independent 6 Yes - 7 7 1 6 7Non-Executive

Mr. B. D. Banerjee Independent 5 Yes - 2 2 1 2 3Non-Executive

Mr. E. A. Kshirsagar Independent 6 Yes - 8 8 5 4 9Non-Executive

Mr. Prakash R. Rastogi Independent 6 Yes - 2 2 - 1 1Non-Executive


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Director Category No. of Board Attendance at No. of Directorships* No. of committee positions inMeetings AGM held on (As on 31.03.2013) Mandatory Committees*

attended during 27th June, 2012 (As on 31.03.2013)2012-13

Chairman Member Total Chairman Member Total

Mr. Bharat Vasani Non-Independent 6 Yes - 5 5 - 1 1Non-Executive

Dr. Venkatrao S. Sohoni Non-Independent 1 NA - 3 3 - 2 2(upto 28.05.2012) Non-Executive

Dr. K. P. Prabhakaran Nair Independent 6 Yes - 1 1 - 2 2Non-Executive

Mr. R. Mukundan Non-Independent 4 Yes - 5 5 - 1 1Non-Executive

Dr. Yoginder K. Alagh Independent 5 Yes - 5 5 1 6 7Non-Executive

Dr. Y. S. P Thorat Independent 5 Yes 1 9 10 5 1 6Non-Executive

Mr. V. Shankar Non-Independent 6 Yes 2 3 5 2 1 3(Managing Director Executive& CEO)

* Excludes Directorships in Private Limited Companies, Foreign Companies, Government Bodies, Alternate Directorships and companies registeredunder Section 25 of the Companies Act, 1956. Only Audit Committee and Shareholders’/ Investors’ Grievance Committee of Indian public companies

have been considered for committee positions.

The Company held 6 Board Meetings during 2012-13 and the gap between two meetings did not exceed fourmonths. The dates on which the Board Meetings were held were: 23rd April, 2012; 27th June, 2012; 23rd July, 2012;17th October, 2012; 23rd January, 2013 and 18th March, 2013.

Board Procedure

The annual calendar of Board Meetings is agreed upon at the beginning of the year. The agenda is circulated well inadvance to the Board members, along with comprehensive background information on the items in the agenda toenable the Board to arrive at appropriate decisions. The information as required under Annexure IA to Clause 49 ismade available to the Board. The Board also reviews the declaration made by the Managing Director regardingcompliance with all applicable laws on a quarterly basis.

Code of Conduct

The Company has adopted the Tata Code of Conduct for all employees of the Company, including the ManagingDirector. The Board has also laid down a Code of Conduct for the Non-Executive Directors of the Company. Both theCodes are posted on the Company’s website.

All Board members and senior management personnel (as per Clause 49 of the Listing Agreement) have affirmedcompliance with the applicable Code of Conduct. A declaration to this effect, signed by the Managing Director &CEO forms part of this report.

The Company did not have any pecuniary relationship or transactions with Non-Executive Directors during the year.

3. AUDIT COMMITTEE

Terms of reference

The Audit Committee functions according to its Charter that defines its composition, authority, responsibilities andreporting functions, in accordance with Clause 49 of the Listing Agreement and Section 292A of the Companies Act,1956. The terms of reference of the Audit Committee are as follows:

o To overview the Company’s financial reporting process and disclosure of its financial information to ensure thatthe financial statements are correct, sufficient and credible.

o To review with the management the quarterly and annual financial statements before submission to the Boardfor approval.

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o To recommend to the Board the appointment, re-appointment and, if required, the replacement or removal ofstatutory auditors, fixation of audit fees and to approve payment for any other services rendered by the statutoryauditors.

o To review with the management, performance of the statutory and internal auditors.o To review the adequacy of the internal audit function and the adequacy and efficacy of the internal control

systems.o To review the findings of any internal investigations by the internal auditors.o To look into the reasons for substantial defaults in payments to depositors, debenture holders, shareholders and

creditors.o To review the statement of significant related party transactions submitted by the management.o To review the functioning of the Whistle Blower mechanism.o And, generally, all items listed in Clause 49 II (D) of the Listing Agreement.

Composition and Attendance during the year

The Audit Committee of the Company is constituted in accordance with the provisions of Clause 49 of the ListingAgreement read with Section 292A of the Companies Act, 1956. All members of the Committee are financiallyliterate, with Mr. E. A. Kshirsagar and Mr. H. R. Khusrokhan having the relevant accounting and financial managementexpertise.

The composition of the Audit Committee and the details of Meetings attended by the Directors during the year aregiven below:

Name of the Member Category No. of Meetingsattended during 2012-13

Mr. E. A. Kshirsagar, Chairman Independent, Non-Executive 8

Mr. Homi R. Khusrokhan, Member Non-Independent, Non-Executive 7

Mr. B. D. Banerjee, Member Independent, Non-Executive 7

Mr. Prakash R. Rastogi, Member Independent, Non-Executive 8

Dr. Venkatrao S. Sohoni, Member Non-Independent, Non-Executive 1(upto 28.05.2012)

Dr. K. P. Prabhakaran Nair, Member Independent, Non-Executive 8

Dr. Yoginder K. Alagh, Member Independent, Non-Executive 7

The Audit Committee met 8 times during the year and the gap between two meetings did not exceed four months.The dates on which the Audit Committee Meetings were held were: 23rd April, 2012; 27th June, 2012; 23rd July, 2012;24th September, 2012; 17th October, 2012; 27th November, 2012; 23rd January, 2013 and 18th March, 2013. Necessaryquorum was present at the above Meetings.

During the year, the Audit Committee reviewed key audit findings covering operational, financial and complianceareas. Risk mitigation plans covering key risks affecting the Company were presented to the Committee. TheChairman of the Committee briefs the Board members about the significant discussions at Audit CommitteeMeetings.

The meetings of the Audit Committee are usually attended by the Managing Director & CEO, the Financial Controller,the Head of Internal Audit, the Company Secretary and a representative of the Statutory Auditors. The Business andOperation Heads are invited to the Meetings, when required. The Company Secretary acts as the secretary to theCommittee.

The Chairman of the Audit Committee, Mr. E. A. Kshirsagar was present at the Annual General Meeting of theCompany held on 27th June, 2012.


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4. NOMINATIONS & REMUNERATION COMMITTEE

Terms of reference

The terms of reference of the Nominations & Remuneration Committee are as follows:

o Make recommendations regarding the composition of the Board, identify independent Directors to be inductedto the Board from time to time and take steps to refresh the composition of the Board from time to time.

o Provide guidance and direction in developing and implementing the reward philosophy of the Company.

o Evaluate and approve the appointment and remuneration of senior executives, the Company’s remunerationplan, annual salary increase principles and budgets, annual and long term incentive plans of the Company,policies and programs such as succession planning, employment agreements, severance agreements and anyother benefits.

o Review progress on the Company leadership development programs, including for promotion to the Board,employee engagement initiatives and employee surveys.

o Consider and approve matters relating to normal retirement plans, Voluntary Retirement and Early SeparationSchemes for employees of the Company.

o Establish key performance metrics to measure the performance of the Managing Director and the executiveteam including the use of financial, non-financial and qualitative measures.

o Evaluate executive team performance regularly to strengthen the cumulative annual assessment and to providetimely feed-back to the assessed individuals.

o Developing a view on the human resources capability in the business by periodically engaging with levelsbelow the executive team.

o Review and recommend to the Board the remuneration and commission to the managing and executive directorsand define the principles, guidelines and process for determining the payment of commission to non-executivedirectors of the Company.


The composition of the Committee and the details of Meetings attended by the Directors during the year are givenbelow:

Name of the Member Category No. of Meetingsattended during 2012-13

Mr. B. D. Banerjee, Chairman Independent, Non-Executive 3

Mr. R. Gopalakrishnan, Member Non-Independent, Non-Executive 3

Mr. E. A. Kshirsagar, Member Independent, Non-Executive 3


The Committee met three times during the year, on 23rd April, 2012; 24th September, 2012 and 13th February, 2013.

The Chairman of the Nominations & Remuneration Committee, Mr. B. D. Banerjee was present at the Annual GeneralMeeting of the Company held on 27th June, 2012.

Remuneration Policy

The remuneration of senior management is decided taking into consideration the employment scenario, remunerationpackage of the industry and remuneration package of managerial talent in other industries. The annual variable payof senior managers is linked to the performance of the Company in general and their individual performance for therelevant year, measured against specific Key Result Areas, which are aligned to the Company’s objectives.

The Non-Executive Directors are paid remuneration by way of commission and sitting fees. In terms of the shareholders’approval obtained at the Annual General Meeting held on 30th May, 2008, commission is paid at a rate not exceeding1% per annum of the profits of the Company, computed in accordance with the provisions of the Companies Act,1956. Since the above approval was valid upto 31st March, 2013, Members’ approval is being sought at the forthcomingAnnual General Meeting, enabling the payment of commission not exceeding 1% per annum of the net profits of

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the Company to Non-Executive Directors for five financial years commencing from 1st April, 2013. The distribution ofcommission among the Non-Executive Directors is recommended by the Nominations & Remuneration Committeeand approved by the Board. The commission is distributed on the basis of their attendance and contribution at theBoard and Committee Meetings as well as guidance provided to senior management other than at meetings.

The Company paid sitting fees of `20,000/- per meeting to the Non-Executive Directors for attending meetings ofthe Board, Executive Committee of the Board, the Audit Committee and the Nominations & Remuneration Committee,`10,000/- per meeting for attending the meetings of the Property Committee and `5,000/- per meeting for attendingmeetings of the Shareholders’/ Investors’ Grievance Committee.

The Company pays remuneration by way of salary, perquisites and allowances (fixed component) and commission(variable component) to the Managing Director. Salary is paid within the range approved by the shareholders.Annual increments, effective 1st April each year, are approved by the Board, as per the recommendations of theNominations & Remuneration Committee. Perquisites and allowances are subject to such overall ceiling as may befixed by the Board from time to time. Within the prescribed ceiling, the perquisites are approved by the Nominations& Remuneration Committee. Commission is calculated with reference to the net profits of the Company in a particularfinancial year and is determined by the Board of Directors at the end of the financial year, based on therecommendations of the Nominations & Remuneration Committee, subject to the overall ceilings stipulated in theCompanies Act, 1956. Specific amount payable as commission is based on the performance criteria laid down by theBoard, which broadly takes into account the profits earned by the Company for the year.

Details of remuneration for 2012-13

The aggregate value of salary, perquisites and commission paid to Mr. V. Shankar, Managing Director & CEO, duringthe year 2012-13 is `2,41,73,392/-, comprising:

Salary : `43,20,000/-

Perquisites and allowances : `68,53,392/-

Commission for the financial year 2011-12, paid during 2012-13 : `1,30,00,000/-

Period of Agreement : upto 12th March, 2017

Notice period : The Agreement may be terminated by either party giving theother party six months’ notice or the Company paying six months’remuneration in lieu thereof.

Severance fees : Nil

The sitting fees paid during the financial year 2012-13 to the Non-Executive Directors for attending the Board andCommittee Meetings for the year 2012-13 and the commission paid to them during 2012-13 for the year 2011-12,are as follows:

Name of Director Fees paid (`) Commission for thefinancial year 2011-12, paid

during 2012-13 (`)

Mr. R. Gopalakrishnan 2,60,000 18,70,000

Mr. Homi R. Khusrokhan 3,40,000 11,55,000

Mr. B. D. Banerjee 3,30,000 17,00,000

Mr. E. A. Kshirsagar 4,30,000 21,40,000

Dr. S. Ramanathan (upto 30.06.2011) NA 4,55,000

Mr. Prakash R. Rastogi 4,00,000 11,60,000

Mr. Bharat Vasani 1,40,000 14,00,000

Dr. Venkatrao S. Sohoni (upto 28.05.2012) 45,000 4,55,000

Dr. K. P. Prabhakaran Nair 2,90,000 17,00,000

Dr. Yoginder K. Alagh 2,40,000 10,10,000

Dr. Y. S. P. Thorat 1,00,000 4,55,000

None of the Non-Executive Directors hold any shares in the Company.


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5. SHAREHOLDERS’/ INVESTORS’ GRIEVANCE COMMITTEE

Terms of reference

The Shareholders’/ Investors’ Grievance Committee looks into the redressal of investors’ complaints, such as transferof shares, non-receipt of annual report and non-receipt of declared dividends. In addition, the Committee has alsobeen mandated to set forth the policies relating to and to oversee the implementation of the Code of Conduct forPrevention of Insider Trading and to review the concerns received under the Tata Code of Conduct.

The Company has adopted the Code of Conduct for Prevention of Insider Trading, under the SEBI (Prohibition ofInsider Trading) Regulations. Mr. Ashish Mehta, Financial Controller has been appointed as the Compliance Officer forthe implementation of and overseeing compliance with the Regulations and the Code across the Company.

The Company has also adopted the Code of Corporate Disclosure Practices for ensuring timely and adequate disclosureof Price Sensitive Information, as required under the Regulations. The Managing Director & CEO is the PublicSpokesperson for this purpose.


The Shareholders’/ Investors’ Grievance Committee met twice during the year, on 23rd April, 2012 and 17th October,2012.

The composition of the Shareholders’/ Investors’ Grievance Committee and the details of the Meetings attended bythe Directors during the year are given below:

Name of the Member Category No. of Meetings attendedduring 2012-13



Dr. Venkatrao S. Sohoni, Member Non-Independent, Non-Executive 1(upto 28.05.2012)

Dr. K. P. Prabhakaran Nair, Member Independent, Non-Executive 2

Mr. V. Shankar, Member Non-Independent, Executive 2

Name, designation and address of Compliance Officer

P. S. MeherhomjiCompany Secretary701 7th Floor Swastik ChambersC. S. T. Road ChemburMumbai 400 071

Phone: 022 - 6776 1657Fax: 022 - 6776 1775

Email: [email protected]

Shareholders may also correspond with the Company on the email address: [email protected]

A total of 671 correspondences were received from investors during 2012-13, of which 4 cases were reported ascomplaints. Two correspondences remained pending as on 31st March, 2013. These were received during the lastweek of March 2013 and hence were pending on 31st March, 2013, but have been subsequently replied to, ascertified by TSR Darashaw Pvt. Ltd. (Registrars).

One request for transfer of 750 shares and one request for dematerialization of 750 shares were pending as on 31stMarch, 2013. These requests were received during the last week of March 2013 and hence were pending on 31stMarch, 2013, but have been subsequently processed, as certified by the Registrars.

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6. OTHER COMMITTEES

Executive Committee of the Board

The Executive Committee of the Board is responsible for reviewing, before presentation to the full Board, items suchas Business and strategy review, long-term financial projections and cash flows, capital and revenue budgets,acquisitions, divestments and business restructuring proposals. The Committee is also responsible for advising themanagement on development of business plans and future strategies for the Company.

The composition of the Executive Committee of the Board and the details of the Meetings attended by the Directorsduring the year are given below:


Mr. R. Gopalakrishnan, Chairman Non-Independent, Non-Executive 4

Mr. Homi R. Khusrokhan, Member Non-Independent, Non-Executive 4



Mr. R. Mukundan, Member Non-Independent, Non-Executive 2

Mr. V. Shankar, Member Non-Independent, Executive 4

The Executive Committee of the Board met four times during the year, on 12th July, 2012; 23rd October, 2012;22nd January, 2013 and 28th February, 2013.

The Financial Controller is a permanent invitee to the Committee.

Property Committee

The Property Committee has been constituted to advice the management on unlocking the value of the surplusassets of the Company.

The composition of the Property Committee and the details of the Meetings attended by the Directors during theyear are given below:





Mr. Bharat Vasani, Member Non-Independent, Non-Executive 2

The Property Committee met twice during the year, on 25th June, 2012 and 4th December, 2012.


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7. SUBSIDIARY COMPANIES

The Company does not have any material unlisted Indian subsidiary as defined under Clause 49 of the ListingAgreement, viz. an unlisted subsidiary incorporated in India, whose turnover or net worth (i.e. paid-up capital andfree reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding companyand its subsidiaries in the immediately preceding accounting year. It is, therefore, not required to have an IndependentDirector of the Company on the Board of such subsidiary.

The Company’s Audit Committee reviews the consolidated financial statements of the Company as well as thefinancial statements of the subsidiaries. The minutes of the Board Meetings, along with a report of the significantdevelopments of the unlisted subsidiaries of the Company, are periodically placed before the Board of Directors ofthe Company.

8. GENERAL BODY MEETINGS

a) Location, date and time of Annual General Meetings held during the last 3 years and special resolutions passed:

Day and Date Location Time Special Resolutions

Wednesday, 27th June, Auditorium, Yashwant Rao 3.00 p.m. There was no matter that required2012 Chavan Pratishthan, passing of a special resolution.

Chavan Centre, GeneralJagannath Bhosale Marg,Mumbai 400 021.

Thursday, 30th June, Auditorium, Yashwant Rao 3.30 p.m. Alteration of the Articles of Association2011 Chavan Pratishthan, of the Company

Chavan Centre, GeneralJagannath Bhosale Marg,Mumbai 400 021.

Tuesday, 15th June, Walchand Hirachand Hall, 3.30 p.m. There was no matter that required2010 4th Floor, Indian Merchants’ passing of a special resolution.

Chamber Building,IMC Marg, Churchgate,Mumbai 400 020.

All resolutions moved at the last Annual General Meeting were passed by a show of hands by the requisitemajority of shareholders present at the meeting.

b) No Extra-ordinary General Meeting of the shareholders was held during the year.

c) Postal Ballot: During the year under review, no resolution was put through by Postal Ballot.

9. DISCLOSURES

a) There are no materially significant related party transactions of the Company which have potential conflict withthe interests of the Company at large.

b) During the year, there were no materially significant related party transactions, i.e. transactions of the Companyof material nature with its promoters, their subsidiaries, the Directors or the management or relatives, etc. thatmay have potential conflict with the interests of the Company at large. Declarations have been received fromthe senior management personnel to this effect.

c) The Company has complied with the requirements of the Stock Exchanges/ SEBI and statutory authorities on allmatters related to the capital markets during the last three years. No penalty or strictures were imposed on theCompany by these authorities.

d) The Managing Director (CEO) and the Financial Controller (CFO) have certified to the Board in accordance withClause 49 V of the Listing Agreement pertaining to CEO/ CFO certification for the Financial Year ended 31stMarch, 2013.

41

e) The Company has a well defined risk management framework in place. The Company periodically places beforethe Audit Committee and the Board, the key risks and the risk assessment and mitigation procedures followedby the Company.

f ) The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the employees to reporttheir concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code ofConduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees whoavail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It isaffirmed that no personnel of the Company has been denied access to the Audit Committee.

g) The Company has followed the Accounting Standards laid down by The Companies (Accounting Standards)Rules, 2006 in the preparation of its financial statements.

h) The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement relatingto Corporate Governance. Further, the status of compliance with the non-mandatory requirements is as under:

o The Non-Executive Chairman maintains a separate office, for which the Company does not reimburseexpenses.

o The Company has set up the Remuneration Committee as per the provisions of Clause 49.

o Half yearly performance of the Company is sent to all shareholders.

o The financial statements of the Company are unqualified.

o The Company has adopted a Whistle Blower Policy, which has been widely disseminated to all employeesin the Company.

o The Company has adopted the guidelines for the composition of the Board of Directors, which provides forthe tenure and retirement age for the Managing and Non-Executive Directors.

10. MEANS OF COMMUNICATION

i) The quarterly and the half yearly results, published in the proforma prescribed by the Listing Agreement, areapproved and taken on record by the Board of Directors of the Company within one month of the close of therelevant quarter. The approved results are forthwith sent to the Stock Exchanges where the Company’s sharesare listed. The results are also published within 48 hours in Hindu Business Line (in English) and MumbaiLakshadweep (in Marathi). The results are displayed on the Company’s website, www.rallis.co.in and are uploadedon the Corporate Filing and Dissemination System (CFDS), a portal to view information filed by listed companies.

ii) The Company publishes the audited annual results within the stipulated period of two months from the closeof the financial year as required by the Listing Agreement. The annual audited results are also communicated tothe Stock Exchanges where the Company is listed, published in the newspapers and displayed on the Company’swebsite and on CFDS.

iii) Official news releases and presentations made to Institutional Investors and Analysts are posted on the Company’swebsite.

iv) Comprehensive information about the Company, its business and operations and press releases can be viewedon the Company’s website. The “Investor Relations” section on the website gives information relating to financialresults, annual reports, shareholding pattern and presentations made to analysts and at Annual General Meetings.Information about unclaimed dividends is also available in this section, under the head “Amounts pendingtransfer to IEPF”.

Members also have the facility of raising their queries/ complaints through the Shareholder Query Form availableunder “Shareholder Information” in the “Investor Relations” section of the website.

v) The quarterly Shareholding Pattern and Corporate Governance Report of the Company are posted throughCFDS. They are also filed with the National Stock Exchange of India Ltd. through NSE Electronic ApplicationProcessing System (NEAPS). Hard copies of the same are also filed with the Stock Exchanges where the Company’sshares are listed.


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vi) The Company sends an annual reminder to shareholders who have not claimed their dividends. Circulars arealso sent periodically to shareholders urging them to opt for NECS as the mode for receiving dividends.

vii) Management Discussion and Analysis Report forms a part of the Annual Report.

11. GENERAL SHAREHOLDER INFORMATION

The Company is registered with the Registrar of Companies, Maharashtra, Mumbai. The Corporate Identity Number(CIN) allotted to the Company by the Ministry of Corporate Affairs (MCA) is L36992MH1948PLC014083

Annual General Meeting date, time and venue:

Monday, 24th June, 2013 at 4.00 p.m. at the Auditorium, Yashwant Rao Chavan Pratishthan, Chavan Centre, GeneralJagannath Bhosale Marg, Mumbai 400 021.

As required under Clause 49 IV (G) (i) of the Listing Agreement, particulars of Directors seeking re-appointment aregiven in the Explanatory Statement to the Notice of the Annual General Meeting to be held on 24th June, 2013.

Financial Calendar : April to March

Date of book closure : 11th June, 2013 to 24th June, 2013 (both days inclusive)

Dividend payment date : 26th June, 2013

Listing on Stock Exchanges : The Company’s Equity Shares are listed on the following StockExchanges:

BSE Ltd. National Stock Exchange of India Ltd.Phiroze Jeejeebhoy Towers Exchange Plaza, 5th FloorDalal Street Plot No.C/1, G BlockMumbai 400 001 Bandra-Kurla Complex

Bandra (E)Mumbai 400 051

The Company has paid the listing fees to these Stock Exchanges for the year 2012-13.

Stock Code on BSE Ltd. : 500355

Stock Code on the National Stock Exchange of India Ltd. : RALLIS EQ

Demat International Security Identification Number (ISIN)in NSDL and CDSL for Equity Shares : INE613A01020

Listing of Debt Instrument:

The Company’s 750, Secured Redeemable Non Convertible Debentures 2010-11 Series-I, of `10,00,000/- each fullypaid-up, issued on private placement basis, are listed on the Wholesale Debt Market Segment of BSE Ltd.

Rate of interest : 9.05%

Date of Redemption : 29th October, 2013

Scrip Code on BSE Ltd. : 947111

Demat International Security Identification Number (ISIN)in NSDL and CDSL for Debt Instruments : INE613A07019

43

Market Information:

Market price data: High/ low, Number and Value of shares traded during each month in the last financial year:

Month BSE Ltd. The National Stock Exchange of India Ltd.

High Low No. of Value of No. of High Low No. of Value of No. of(`) (`) Shares Shares Trades (`) (`) Shares Shares Trades

Traded Traded Traded Traded(` Lacs) (` Lacs)

April 2012 135.40 111.55 16,35,328 2,044.38 21,690 135.25 111.05 84,26,989 10,366.22 85,300

May 2012 133.00 112.50 23,29,713 2,879.85 21,239 140.00 112.00 68,50,334 8,413.40 1,09,767

June 2012 144.70 120.05 29,10,990 3,867.03 33,377 144.35 119.75 89,76,610 12,021.18 1,12,349

July 2012 142.45 117.50 11,03,820 1,413.62 17,109 142.00 117.50 49,44,813 6,376.27 68,251

August 2012 139.50 122.00 15,32,389 1,973.35 14,427 139.50 121.00 42,22,277 5,493.05 53,693

September 2012 150.00 130.35 12,45,050 1,764.70 21,976 150.20 129.00 44,92,616 6,346.63 71,571

October 2012 154.30 135.30 24,68,802 3,537.01 27,191 154.60 135.25 74,16,223 10,675.68 84,335

November 2012 168.50 139.75 64,74,375 9,843.30 33,419 168.50 139.70 93,66,880 14,427.56 94,761

December 2012 168.75 148.10 10,20,784 1,603.37 18,512 169.95 148.00 34,39,819 5,394.66 62,553

January 2013 155.90 129.05 18,89,870 2,703.60 25,626 155.90 129.00 59,03,070 8,548.83 72,107

February 2013 138.90 112.50 18,00,722 2,201.57 13,614 142.00 112.50 43,16,872 5,443.01 54,436

March 2013 130.25 111.10 11,37,551 1,345.19 14,635 130.45 111.00 34,61,824 4,120.59 53,127

0

5000

10000

15000

20000

25000

Mar-13Feb-13Jan-13Dec-12Nov-12Oct-12Sep-12Aug-12Jul-12Jun-12May-12Apr-120

50

100

150

200

Performance of Rallis Share Price in comparison with BSE Sensex

BSE Sensex

BSE

Sens

ex

Ralli

s Sh

are

Pric

e

Rallis Share Price


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Share Registrars and Transfer Agents:

TSR DARASHAW PVT. LTD.

6-10 Haji Moosa Patrawala Industrial Estate,20 Dr. E. Moses Road,Mahalaxmi,Mumbai 400 011

Tel. No.: 022-6656 8484Fax No.: 022-6656 8494E-mail: [email protected]: www.tsrdarashaw.comBusiness Hours: 10.00 a.m. to 3.30 p.m. (Monday to Friday)

For the convenience of shareholders based in the following cities, transfer documents and letters will also be accepted atthe following Branch Offices/ agencies of TSR Darashaw Pvt. Ltd. (TSRDPL):

Branches of TSRDPL

TSR Darashaw Pvt. Ltd., TSR Darashaw Pvt. Ltd.,503, Barton Centre, (5th Floor), Tata Centre, 1st Floor,84, Mahatma Gandhi Road, 43, J. L. Nehru Road,Bangalore 560 001. Kolkata 700 071.Tel.: 080-2532 0321 Tel.: 033-2288 3087Fax: 080-2558 0019 Fax: 033-2288 3062Email: [email protected] Email: [email protected]

TSR Darashaw Pvt. Ltd., TSR Darashaw Pvt. Ltd.,2/42, Ansari Road, “E” Road, Northern Town,1st Floor, Daryaganj, Bistupur,Sant Vihar, Jamshedpur 831 001.New Delhi 110 002. Tel.: 0657-242 6616Tel.: 011-2327 1805 Fax: 0657-242 6937Fax: 011-2327 1802 Email: [email protected]: [email protected]

Agent of TSRDPL

Shah Consultancy Services Ltd.,3, Sumatinath Complex, 2nd Dhal,Pritam Nagar, Ellisbridge,Ahmedabad 380 006.Telefax: 079-2657 6038Email: [email protected]

Share Transfer System

Documents for transfer of shares in physical form can be lodged with TSR Darashaw Pvt. Ltd. at its registered addressor at any of the above mentioned branch offices or at the office of the Agent of TSRDPL. The transfers are normallyprocessed within 10-12 days from the date of receipt, if the documents are complete in all respects.

Secretarial Audit

o Pursuant to Clause 47 (c) of the Listing Agreement with the Stock Exchanges, certificates have been issued, on ahalf-yearly basis, by a Company Secretary in practice, certifying due compliance of share transfer formalities bythe Company.

o A Company Secretary in practice carries out a quarterly Reconciliation of Share Capital Audit, to reconcile thetotal admitted capital with NSDL and CDSL and the total issued and listed capital. The audit confirms that thetotal issued/ paid-up capital is in agreement with the aggregate of the total number of shares in physical formand the total number of shares in dematerialized form (held with NSDL and CDSL).

45

Distribution of shareholding as on 31st March, 2013:

Holding of Nominal Value: `1/-

Sr. Amount % to No. of % to TotalNo. Range Holding (`) Capital Holders Holders

1 1 to 500 26,21,758 26,21,758 1.35 19,974 74.77

2 501 to 1000 22,53,447 22,53,447 1.16 2,855 10.69

3 1001 to 2000 25,71,209 25,71,209 1.32 1,711 6.41

4 2001 to 3000 17,69,973 17,69,973 0.91 674 2.52

5 3001 to 4000 9,71,888 9,71,888 0.50 269 1.01

6 4001 to 5000 10,65,988 10,65,988 0.55 228 0.85

7 5001 to 10000 35,52,473 35,52,473 1.82 487 1.82

8 Greater than 10000 17,96,62,154 17,96,62,154 92.39 515 1.93

Total 19,44,68,890 19,44,68,890 100.00 26,713 100.00

Shareholding pattern as on 31st March, 2013:

Sr. No. Category of Shareholders Total Holding Percentage

1 Tata Companies * 9,74,16,610 50.09

2 Government/ Other Public Financial Institutions and 51,45,638 2.65Insurance Companies *

3 Foreign Institutional Investors and Foreign Companies 2,06,55,939 10.62

4 Non Resident Individuals 12,61,598 0.65

5 Other Bodies Corporate & Trusts 1,34,31,008 6.91

6 Nationalized Banks and Mutual Funds 86,36,679 4.44

7 Foreign Banks and Other Banks 81,773 0.04

8 Individuals 4,78,39,645 24.60

Total 19,44,68,890 100.00

* Based on legal advice, Tata AIA Life Insurance Co. Ltd. is not considered part of the Promoter Group. It holds 15,43,369 EquityShares, representing 0.79% of the paid-up Equity Share Capital of the Company. Its holding is included under the holdings ofinsurance companies.

Dematerialization of shares and liquidity

The Company’s shares are compulsorily traded in dematerialized form and are available for trading on both thedepositories, viz. National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL).

Percentage of shares held in physical and dematerialized form as on 31st March, 2013:

Physical form : 1.75

Electronic form with NSDL : 93.66

Electronic form with CDSL : 4.59

The Company’s shares are regularly traded on BSE Ltd. and the National Stock Exchange of India Ltd. in theelectronic form.


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Plant locations:

(i) GIDC Estate, Plot No.3301, Ankleshwar 393 002, Dist. Bharuch, Gujarat.

(ii) GIDC Estate, Plot No.2808, Ankleshwar 393 002, Dist. Bharuch, Gujarat.

(iii) GIDC Estate, Plot No.3000, Ankleshwar 393 002, Dist. Bharuch, Gujarat.

(iv) C 5/6, MIDC Industrial Area, Phase III, Shivani, Akola 444 104, Maharashtra.

(v) Plot No.D-26, Lote Parashuram, MIDC, Near Hotel Vakratunda, Taluka Khed, Dist. Ratnagiri 415 722, Maharashtra.

(vi) Plot No. Z/ 110, Dahej SEZ Part - II, P.O. Lakhigam, Taluka Vagra, Dist. Bharuch 392 130, Gujarat.

Investor correspondence address:

Rallis India Ltd.

Secretarial Division701 7th Floor Swastik ChambersC. S. T. Road ChemburMumbai 400 071

OR

TSR Darashaw Pvt. Ltd.Unit: Rallis India Ltd.6-10 Haji Moosa Patrawala Industrial Estate,20 Dr. E. Moses Road,Mahalaxmi,Mumbai 400 011.

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To,The Members of Rallis India Limited

Declaration by the Managing Director underClause 49 of the Listing Agreement

———————————————————————————

I, V. Shankar, Managing Director & CEO of Rallis India Limited hereby declare that all the members of the Board ofDirectors and senior management personnel have affirmed compliance with the Code of Conduct, as applicable to them,for the year ended 31st March, 2013.

V. ShankarManaging Director & CEO

Mumbai, 25th April, 2013

AUDITORS’ CERTIFICATE

TO THE MEMBERS OFRALLIS INDIA LIMITED

We have examined the compliance of conditions of Corporate Governance by Rallis India Limited, for the year endedMarch 31, 2013, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination hasbeen limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring thecompliance of the conditions of the Corporate Governance as stipulated in the said Clause. It is neither an audit nor anexpression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representationsmade by the Directors and the management, we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in Clause 49 of the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the management has conducted the affairs of the Company.

For DELOITTE HASKINS AND SELLSChartered Accountants

(Firm Registration No.: 117366W)

B. P. Shroff(Partner)

Membership No.34382MUMBAI, 25th April, 2013


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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF RALLIS INDIA LIMITEDReport on the Financial StatementsWe have audited the accompanying financial statements of RALLIS INDIA LIMITED (“the Company”), which comprisethe Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss, and the Cash Flow Statement for the year thenended, and a summary of the significant accounting policies and other explanatory information.Management’s Responsibility for the Financial StatementsThe Company’s Management is responsible for the preparation of these financial statements that give a true and fairview of the financial position, financial performance and cash flows of the Company in accordance with the AccountingStandards referred to in Section 211(3C) of the Companies Act, 1956 (“the Act”) and in accordance with the accountingprincipals generally accepted in India. This responsibility includes the design, implementation and maintenance of internalcontrol relevant to the preparation and presentation of the financial statements that give a true and fair view and are freefrom material misstatement, whether due to fraud or error.Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit inaccordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financialstatements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the Company’s preparation and fair presentation of the financial statements inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made by the Management, as well asevaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.OpinionIn our opinion and to the best of our information and according to the explanations given to us, the aforesaid financialstatements give the information required by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India:(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government in

terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:(a) We have obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit.(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears

from our examination of those books.(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are

in agreement with the books of account.(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with

the Accounting Standards referred to in Section 211(3C) of the Act.(e) On the basis of the written representations received from the directors as on 31st March, 2013 taken on record

by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as adirector in terms of Section 274(1)(g) of the Act.

For DELOITTE HASKINS & SELLSChartered Accountants

(Firm Registration No. 117366W)


MUMBAI 25th April, 2013 (Membership No. 34382)

49

ANNEXURE TO THE AUDITORS’ REPORT

(Referred to in paragraph 1 of “Report on Other Legal and Regulatory Requirements”section of our report of even date)

(i) Having regard to the nature of the Company’s business/activities/result/transactions, etc. clauses (x), (xii), (xiii), (xiv),(xv), (xviii), (xix), (xx) of paragraph 4 of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situationof the fixed assets.

(b) The fixed assets were physically verified during the period by the Management in accordance with a regularprogramme of verification which, in our opinion, provides for physical verification of all the fixed assets atreasonable intervals. According to the information and explanations given to us, no material discrepancies werenoticed on such verification.

(c) The fixed assets disposed of during the period, in our opinion, do not constitute a substantial part of the fixedassets of the Company and such disposal has, in our opinion, not affected the going concern status of theCompany.

(iii) In respect of its inventory:

(a) As explained to us, the inventories, excluding materials in transit and materials lying with third parties werephysically verified during the period by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us, the procedures of physicalverification of inventories followed by the Management were reasonable and adequate in relation to the size ofthe Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintainedproper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or otherparties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanationsthat some of the items purchased are of special nature and suitable alternative sources are not readily available forobtaining comparable quotations, there is an adequate internal control system commensurate with the size of theCompany and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goodsand services. During the course of our audit, we have not observed any major weakness in such internal controlsystem.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of theCompanies Act, 1956, to the best of our knowledge and belief and according to the information and explanationsgiven to us:

(a) The particulars of contracts or arrangements referred to Section 301 that were required to be entered in theRegister maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of ` 5 lakhs in respect of any party, the transactions have been madeat prices which are prima facie reasonable having regard to the prevailing market prices at the relevant timeother than in respect of certain purchases for which comparable quotations are not available and in respect ofwhich we are unable to comment.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from thepublic during the year. According to the information and explanations given to us, no order has been passed by theCompany Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.

(viii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature ofits business.


50

RALLIS


(ix) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the CentralGovernment for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 and are of theopinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, notmade a detailed examination of the records with a view to determining whether they are accurate or complete.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, InvestorEducation and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, CustomDuty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and ProtectionFund, Employees’ State Insurance,Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other materialstatutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date theybecame payable.

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not beendeposited as on 31st March, 2013 on account of disputes are given below:

Statute Nature of Dues Forum where Dispute Period to which the Amountis pending amount relates involved

(` in lacs)

Sales Tax Laws Sales Tax Joint Commissioner 1998-99 to 2001-02, 483.95(including interest (Appeals) 2005-06 to 2010-11and payment)

Additional Commissioner 1998-99, 2000-01, 2001-02, 253.582006-07 to 2008-09

Deputy Commissioner 1983-84, 1992-93, 1994-95, 498.751996-97 to 2006-07

Assistant Commissioner 1993-94, 1998-99, 1999-00, 117.492001-02, 2003-04 to 2009-10

Tribunal 1992-93, 1995-96 to 2001-02 424.28

Commercial Tax Officer 1990-91, 1996-97, 1997-98, 28.162002-03

Finance Act, Service Tax Assistant Commissioner 2007-08, 2010-11 7.351994

Superintendent of Excise 2007-08 to 2012-13 11.55and Custom

Joint Commissioner 2005-06 to 2009-10 26.73

Tribunal 2006-07 to 2010-11 19.59

Customs Act, Custom Duty High Court 1999-00 144.101962

Central Excise Excise Duty Additional Commissioner 2005-06 26.61Act, 1994 (including penalty

and interest)

Joint Commissioner 1999-00 to 2000-01 62.80(Appeals)

Deputy Commissioner 1999-00 2001-02 29.61

Tribunal 1986-87, 1990-91, 1996 - 97 to 910.461998-99, 1999-00 to 2001-02

Supreme Court 2002-03 186.25

Income Tax Income tax Commissioner of Asst. Yr. 2007-08 and 2008-09 300.31Act, 1961 (including interest Income tax (Appeals)

and payment)

51

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted inthe repayment of dues to banks, financial institutions and debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the term loans have been applied forthe purposes for which they were obtained, other than temporary deployment pending application.

(xiii) In our opinion and according to the information and explanations given to us and on an overall examination of theBalance Sheet, we report that funds raised on short-term basis have not been used during the year for long- terminvestment.

(xiv) To the best of our knowledge and according to the information and explanations given to us, no fraud by theCompany and no material fraud on the Company has been noticed or reported during the year.



B.P. Shroff(Partner)

(Membership No. 34382)

MUMBAI, 25th April 2013


52

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BALANCE SHEET AS AT 31ST MARCH, 2013` lacs

Note No. As at As at31st March, 31st March,

2013 2012EQUITY AND LIABILITIES

Shareholders’ fundsShare capital 2 1,944.71 1,944.71Reserves and surplus 3 60,203.89 53,420.33

62,148.60 55,365.04Non-current liabilities

Long-term borrowings 4 842.19 8,213.16Deferred tax liabilities (Net) 31 2,864.13 1,308.46Other Long term liabilities 5 588.21 383.00Long-term provisions 6 2,954.13 2,853.87

7,248.66 12,758.49Current liabilities

Short-term borrowings 7 - 3,122.04Trade payables 45 21,313.67 21,938.16Other current liabilities 8 12,247.40 6,579.70Short-term provisions 9 3,679.94 3,181.60

37,241.01 34,821.50

Total 106,638.27 102,945.03

ASSETSNon-current assets

Fixed assetsTangible assets 10 a 36,433.86 35,159.01Intangible assets 10 b 768.90 46.75Capital work-in-progress 1,572.62 3,492.11Intangible assets under development 1,091.00 1,545.54

Non-current investments 11 19,243.99 17,797.96Long-term loans and advances 12 8,675.05 8,888.51Other non-current assets 13 - 20.90

67,785.42 66,950.78Current assets

Current investments 14 103.84 296.14Inventories 15 19,034.99 22,416.15Trade receivables 16 14,376.06 8,209.28Cash and cash equivalents 17 2,443.64 1,054.88Short-term loans and advances 18 2,629.48 3,725.89Other current assets 19 264.84 291.91

38,852.85 35,994.25

Total 106,638.27 102,945.03

Summary of significant accounting policies 1Notes referred to above form an integral part of the Balance Sheet and should be read in conjunction therewith.In terms of our report attachedFor DELOITTE HASKINS & SELLS R. GOPALAKRISHNAN ChairmanChartered Accountants

B. D. BANERJEEB.P. SHROFF E. A. KSHIRSAGARPartner PRAKASH R. RASTOGI V. SHANKAR Managing Director & CEO

BHARAT VASANI DirectorsK. P. PRABHAKARAN NAIRR. MUKUNDANYOGINDER K. ALAGH P. S. MEHERHOMJI Company Secretary

Mumbai, 25th April, 2013 Y. S. P. THORAT

}

53

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2013` lacs

Note No. For the For theyear ended year ended31st March, 31st March,

2013 2012

Revenue from operations (gross) 20 141,858.01 126,007.19

Less : Excise Duty 9,479.79 7,882.19

Revenue from Operations (net) (I) 132,378.22 118,125.00

Expenses:

Cost of materials consumed 22 68,566.76 62,063.21

Purchases of Traded Goods 36(b) 12,433.32 9,212.73

Changes in inventories of finished goods,work-in-progress and Stock-in-Trade 23 2,418.86 (382.70)

Employee benefits expense 24 7,784.29 8,033.35

Other expenses 25 20,852.49 19,472.18

Total expenses (II) 112,055.72 98,398.77

Earnings before interest, depreciation, tax and amortization (I-II) 20,322.50 19,726.23

Finance costs 26 1,251.49 1,037.15

Depreciation and amortization expense 10 2,881.05 2,711.08

Other income 21 1,145.45 749.85

Profit before exceptional items 17,335.41 16,727.85

Exceptional items

Cessation Cost - 1,719.11

Profit before tax 17,335.41 15,008.74

Tax expense:

a. Current tax 3,872.11 3,818.47

b. Deferred tax - Charge (net) 1,525.22 1,051.31

Profit for the year 11,938.08 10,138.96

Earnings per equity share (of ` 1 each) : 41

(1) Basic 6.14 5.21

(2) Diluted 6.14 5.21

Summary of significant accounting policies 1

Notes referred to above form an integral part of the Statement of Profit and Loss and should be read in conjunction therewith.

}In terms of our report attachedFor DELOITTE HASKINS & SELLS R. GOPALAKRISHNAN ChairmanChartered Accountants




}


54

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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2013` lacs

For the For theyear ended year ended31st March, 31st March,

2013 2012

A CASH FLOW FROM OPERATING ACTIVITIES:

Profit before tax 17,335.41 15,008.74

Adjustments for :

Depreciation and amortisation expense 2,881.05 2,711.08

Interest expenses 1,184.72 985.14

Interest income (52.27) (35.05)

Interest from Investments (39.55) (46.89)

Surplus on liquidation of subsidiary - (107.69)

Dividend Income (87.61) (23.20)

Credit balances written back (5.67) (442.05)

Provision for supplemental payments on retirement 82.80 (67.83)

Provision for gratuity (137.96) 177.40

Provision for compensated absences (12.91) (22.23)

Unrealised foreign exchange translation loss 56.41 63.64

Profit on sale of assets (net) (includes assets w/off ) (689.21) (224.49)

Operating Profit before Working Capital Changes 20,515.21 17,976.57

Adjustments for :

Trade payables and other liabilities (966.80) (2,145.12)

Trade receivables and other assets (6,199.06) 1,005.48

Inventories 3,381.16 (1,713.04)

Long term loans and advances 247.15 (50.99)

Short term loans and advances 1,103.38 (1,080.21)

CASH GENERATED FROM OPERATIONS 18,081.04 13,992.69

Taxes paid (Net of Refund and interest on refund received) (3,466.87) (4,069.18)

NET CASH FROM OPERATING ACTIVITIES (A) 14,614.17 9,923.51

B CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of fixed assets (4,091.67) (5,033.85)

Proceeds from sale of fixed assets 1,163.30 384.45

Advance received against fixed assets to be disposed off - 650.13

Amount received on liquidation of investment in subsidiary - 108.04

Purchase of current investments (21,585.70) (12,321.46)

Proceeds from redemption of debentures 296.14 290.40

Purchase of non-current investments in subsidiaries (1,549.87) (3,191.83)

Proceeds from sale of current investments 21,585.70 12,321.46

Interest/Dividend received 226.90 153.05

Investments in Bank Deposits (original maturity of more than 3 months) (net) 44.74 (8.51)

NET CASH USED IN INVESTING ACTIVITIES (B) (3,910.46) (6,648.12)

55

C CASH FLOW FROM FINANCING ACTIVITIES:

Proceeds from long-term borrowings 120.58 190.61

Repayment of long-term borrowings (128.22) (18.56)

(Repayment) / Proceeds of short-term borrowings(net) (3,122.04) 2,150.52

Dividends paid on Equity Shares (including dividend distribution tax) (4,954.69) (4,726.51)

Interest Paid (1,203.53) (971.66)

NET CASH USED IN FINANCING ACTIVITIES (C) (9,287.90) (3,375.60)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A) + (B) + (C) 1,415.81 (100.21)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR

Cash in Hand 3.07 2.22

Balances with Scheduled Banks on Current Account and Deposit Account 781.77 882.83

784.84 885.05

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR


Balances with Scheduled Banks on Current Account and Deposit Account 2,197.64 781.77

2,200.66 784.84

Footnotes:

Cash and Cash Equivalents as above 2,200.66 784.84

Restricted Bank Balance 96.18 78.50

Balances with scheduled banks:

On Fixed Deposit as Margin Money against Bank Guarantees 146.80 191.54

CASH AND BANK BALANCES AS PER NOTE 17 2,443.64 1,054.88

Notes referred to above form an integral part of the Cash Flow Statement and should be read in conjunction therewith.

` lacs


2013 2012

In terms of our report attachedFor DELOITTE HASKINS & SELLS R. GOPALAKRISHNAN ChairmanChartered Accountants




}


56

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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 20131. Significant Accounting Policies: -

(a) Basis of Accounting

The financial statements are prepared as per historical cost convention and in accordance with the generallyaccepted accounting principles in India, the provisions of the Companies Act, 1956, and the applicable AccountingStandards referred to in Section 211(3C) of the Companies Act, 1956. All income and expenditure having materialbearing on the financial statements are recognised on accrual basis.

(b) Use of Estimates

The presentation of the financial statements in conformity with the generally accepted accounting principlesrequires the management to make estimates and assumptions that affect the reported amount of assets andliabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions arebased on management’s evaluation of relevant facts and circumstances as on the date of financial statements.The actual outcome may diverge from these estimates.

(c) Fixed Assets and Depreciation / Amortisation

(i) Tangible fixed assets and depreciation

Tangible fixed assets acquired by the Company are reported at acquisition cost, with deductions foraccumulated depreciation and impairment losses, if any.

The acquisition cost includes the purchase price (excluding refundable taxes) and expenses directlyattributable to bring the asset to the location and condition for its intended use. Examples of directlyattributable expenses included in the acquisition cost are delivery and handling costs, installation, legalservices and consultancy services.

Where the construction or development of any such asset requiring a substantial period of time to set upfor its intended use, is funded by borrowings, the corresponding borrowing costs are capitalised up to thedate when the asset is ready for its intended use.

Depreciation is provided on a straight line basis at rates and in the manner specified in Schedule XIV to theCompanies Act, 1956. Fixed assets costing less than ` 5,000 are fully depreciated in the year of purchase.Extra shift depreciation is applied to applicable items of plant and machinery for days additional shifts areworked. Freehold land is not depreciated since it is deemed to have an indefinite economic life. Thepremium paid for acquiring leasehold land is amortised over the period of lease on a straight line basis.

(ii) Intangible assets and amortisation

Intangible assets other than goodwill are valued at cost less amortisation. These generally comprise ofcosts incurred to acquire computer software licences and implement the software for internal use (includingsoftware coding, installation, testing and certain data conversion) as well as costs paid to acquire studiesfor obtaining approvals from registration authorities of products having proven technical feasibility.

Research costs are charged to earnings as they arise.

Costs incurred for applying research results or other knowledge to develop new products, are capitalisedto the extent that these products or registrations are expected to generate future financial benefits. Otherdevelopment costs are expensed as and when they arise.

Goodwill comprises the portion of purchase price for an acquisition that exceeds the market value of theidentifiable assets, with deductions for liabilities, calculated on the date of acquisition, on the Company’sshare in the acquired company’s assets.

Intangible assets are reported at acquisition value with deductions for accumulated amortisation and anyimpairment losses.

Amortisation is provided on a straight line basis over the asset’s anticipated useful life. The useful life isdetermined based on the period of the underlying contract and the period of time over which the intangibleasset is expected to be used and generally does not exceed 10 years.

An impairment test of intangible assets is conducted annually or more often if there is an indication of adecrease in value. The impairment loss, if any, is reported in the Statement of Profit and Loss.

57

(d) Impairment of assets

The carrying values of assets of the Company’s cash-generating units are reviewed for impairment annually ormore often if there is an indication of decline in value. If any indication of such impairment exists, the recoverableamounts of those assets are estimated and impairment loss is recognised, if the carrying amount of those assetsexceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their valuein use. Value in use is arrived at by discounting the estimated future cash flows to their present value based onan appropriate discount factor.

(e) Investments

Long term investments are valued at cost, less provision for other than temporary diminution in value, if any.Current investments are valued at the lower of cost and fair value.

(f) Inventory

Inventories are valued at the lower of cost and net realisable value.

In case of raw materials, packing materials, stores and spare parts and traded finished goods, costs are determinedin accordance with continuous moving weighted average principle. Costs include purchase price, non-refundabletaxes and delivery and handling costs.

Cost of finished goods and work-in-progress are determined using the absorption costing principles. Costincludes cost of materials consumed, labour and a systematic allocation of variable and fixed productionoverheads. Excise duties at the applicable rates are also included in the cost of finished goods.

Net realisable value is estimated at the expected selling price less estimated completion and selling costs.

(g) Revenue Recognition

Sales include products and services, net of trade discounts and exclude sales tax, state value added tax andservice tax.

With regard to sale of products, income is reported when all obligations connected with the transfer of risksand rewards to the buyer have been fulfilled. This usually occurs upon dispatch, after the price has beendetermined and collection of the receivable is reasonably certain.

Income recognition for services takes place as and when the services are performed.

Amounts received from customers specifically towards setting up / expansion of manufacturing facilities, linkedto a contractual arrangement for supply of specified quantities of product manufactured from the said facilitiesat pre-determined prices, are treated as liabilities and recognized as revenue in the Statement of Profit and Lossover the contracted period of supply in proportion to the quantities dispatched.

(h) Financial Income and Borrowing Cost

Financial income and borrowing cost include interest income on bank deposits and interest expense on loans.

Interest from interest-bearing assets is recognised on an accrual basis over the life of the asset based on theconstant effective yield. The effective interest is determined on the basis of the terms of the cash flows underthe contract including related fees, premiums, discounts or debt issuance costs, if any.

Borrowing costs are recognised in the period to which they relate, regardless of how the funds have beenutilised, except where it relates to financing of construction or development of assets requiring a substantialperiod of time to prepare for their intended future use when interest is capitalised up to the date when theasset is ready for its intended use. The amount of interest capitalised (gross of tax) for the period is determinedby applying the interest rate applicable to appropriate borrowings outstanding during the period to the averageamount of accumulated expenditure for the assets during the period.

(i) Foreign Currency Transactions

Transactions in foreign currencies are translated to the reporting currency based on the exchange rate on thedate of the transaction. Exchange differences arising on settlement thereof during the year are recognised asincome or expenses in the Statement of Profit and Loss.

Cash and bank balances, receivables and liabilities (monetary items) in foreign currencies as at the year end arevalued at year end rates, and unrealised translation differences are included in the Statement of Profit and Loss.


58

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Investments in foreign currency (non monetary items) are reported using the exchange rate at the date of thetransaction.

The Company’s forward exchange contracts are not held for trading or speculation. The premium/discountarising on entering into such contract is amortised over the life of such contracts and exchange differencesarising on such contracts are recognised in the Statement of Profit and Loss.

Hedge Accounting

The Company uses currency option contracts to hedge its risks associated with foreign currency fluctuationsrelating to highly probable forecasted transactions. The Company designates such currency option contracts ina cash flow hedging relationship by applying the hedge accounting principles set out in Accounting Standard30 Financial Instruments: Recognition and Measurement.

These contracts are stated at fair value at each reporting date. Changes in the intrinsic value of these contractsthat are designated and effective as hedges of future cash flows are recognised directly in Hedging ReserveAccount under Reserves and Surplus, net of applicable deferred income taxes. The ineffective portion and thetime value is recognised immediately in the Statement of Profit and Loss.

Amounts accumulated in Hedging Reserve Account are reclassified to the Statement of Profit and Loss in thesame periods during which the forecasted transaction affects the Statement of Profit and Loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or nolonger qualifies for hedge accounting. For forecasted transactions, any cumulative gain or loss on the hedginginstrument recognised in Hedging Reserve Account is retained there until the forecasted transaction occurs.

If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss recognised inHedging Reserve Account is immediately transferred to the Statement of Profit and Loss for the period.

(j) Employee Benefits

Short term employee benefits are recognised as an expense at the undiscounted amount expected to be paidover the period of services rendered by the employees to the Company.

The Company has both defined-contribution and defined-benefit plans, of which some have assets in specialfunds or securities. The plans are financed by the Company and in the case of some defined contribution plansby the Company along with its employees.

The contribution as specified under the law are paid to the Provident Fund set up as irrevocable trust by theCompany or to the Regional Provident Fund Commissioner. The Company is generally liable for annualcontribution and any shortfall in the fund assets based on the government specified minimum rates of return.Such contributions and shortfall, if any, are recognised in the Statement of Profit and Loss as an expense in theyear incurred.

Expenses for gratuity and supplemental payment plans are calculated as at the balance sheet date byindependent actuaries in a manner that distributes expenses over the employee’s working life. Thesecommitments are valued at the present value of the expected future payments, with consideration for calculatedfuture salary increases, using a discount rate corresponding to the interest rate estimated by the actuary havingregard to the interest rate on government bonds with a remaining term that is almost equivalent to theaverage balance working period of employees.

Compensated absences which accrue to employees and which can be carried to future periods but are expectedto be encashed or availed in twelve months immediately following the year end are reported as expensesduring the year in which the employees perform the services that the benefit covers and the liabilities arereported at the undiscounted amount of the benefits after deducting amounts already paid. Where there arerestrictions on availment of encashment of such accrued benefit or where the availment or encashment isotherwise not expected to wholly occur in the next twelve months, the liability on account of the benefit isactuarially determined using the projected unit credit method.

(k) Taxes on Income

The Company’s income taxes include taxes on the Company’s taxable profits, adjustment attributable to earlierperiods and changes in deferred taxes. Valuation of all tax liabilities / receivables is conducted at nominalamounts and in accordance with enacted tax regulations and tax rates or in the case of deferred taxes, thosethat have been enacted or substantively enacted.

59

Deferred tax is calculated to correspond to the tax effect arising when final tax is determined. Deferred taxcorresponds to the net effect of tax on all timing differences which occur as a result of items being allowed forincome-tax purposes during a period different from when they were recognised in the financial statements.

Deferred tax assets are recognised with regard to all deductible timing differences to the extent that it isprobable that taxable profit will be available against which deductible timing differences can be utilised. Whenthe Company carries forward unused tax losses and unabsorbed depreciation, deferred tax assets are recognisedonly to the extent there is virtual certainty backed by convincing evidence that sufficient future taxable incomewill be available against which deferred tax assets can be realised.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extentthat it is no longer probable that sufficient taxable profit will be available to allow all or a part of the aggregatedeferred tax asset to be utilised.

(l) Lease Accounting

(i) Operating Leases

Lease of an asset whereby the lessor essentially remains the owner of the asset is classified as operatinglease. The payments made by the Company as lessee in accordance with operational leasing contracts orrental agreements are expensed proportionally during the lease or rental period respectively. Anycompensation, according to agreement, that the lessee is obliged to pay to the lessor if the leasing contractis terminated prematurely is expensed during the period in which the contract is terminated.

(ii) Finance Leases

Depreciation on the assets taken on lease is charged at the rate applicable to similar type of fixed assets asper the Company’s accounting policy on depreciation as stated above. If the leased assets are returnable tothe lessor on the expiry of the lease period, depreciation is charged in accordance with the Company’sdepreciation policy as stated above or on a straight line basis over the lease period, whichever is shorter.

Lease payments made are apportioned between the finance charges and reduction of the outstandingliability in respect of assets taken on lease.

(m) Segment Reporting

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.Segment Revenue, Segment Expenses, Segment Assets and Segment Liabilities have been identified to segmentson the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets andliabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis, havebeen included under “Unallocated Revenue / Expenses / Assets / Liabilities”.

(n) Provisions and Contingencies

A provision is recognised when the Company has a present obligation as a result of a past event and it isprobable that an outflow of resources will be required to settle the obligation, in respect of which a reliableestimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value andare determined based on best estimate required to settle the obligation at the balance sheet date. These arereviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilitiesare not recognised but are disclosed in the notes to the financial statements unless the possibility of an outflowof resources embodying economic benefit is remote. A contingent asset is neither recognised nor disclosed.

(o) Cash Flow Statements

Cash-flow statements are prepared in accordance with the “Indirect Method” as explained in the AccountingStandard (AS) 3 - Cash Flow Statements as prescribed under Section 211(3C) of the Companies Act, 1956.

(p) Cash and Cash Equivalents

Cash and bank balances and current investments that have insignificant risk of change in value, which havedurations up to three months, are included in the Company’s cash and cash equivalents in the Cash FlowStatement.

(q) Earnings per Share

Basic Earnings per Share is calculated by dividing the net profit after tax for the year attributable to equityshareholders of the Company by the weighted average number of equity shares outstanding during the year.


60

RALLIS


2 SHARE CAPITAL:As at 31st March, 2013 As at 31st March, 2012

Number ` lacs Number ` lacs

Authorised

Equity Shares of `1 each 500,000,000 5,000.00 500,000,000 5,000.00

Cumulative Redeemable Preference Shares of ` 10 each 150,000,000 15,000.00 150,000,000 15,000.00

Issued, Subscribed and Fully Paid up

Equity Shares of `1 each fully paid-up 194,468,890 1,944.69 194,468,890 1,944.69

Forfeited Shares

Equity Shares of `1 each 2,000 0.02 2,000 0.02

Total 194,470,890 1,944.71 194,470,890 1,944.71

a. Reconciliation of shares outstanding at the beginning and at the end of the reporting period:

As at 31st March, 2013 As at 31st March, 2012


At the beginning of the year 194,468,890 1,944.69 19,446,889 1,944.69

Sub-division (refer note below) - - 175,022,001 -

Outstanding at the end of the period 194,468,890 1,944.69 194,468,890 1,944.69

Pursuant to the Shareholders’ approval at the Company’s Annual General Meeting held on 30th June, 2011, theCompany’s Equity Shares of face value of `10 each were sub-divided into ten Equity Shares of face value of` 1 each with effect from 18th July, 2011.

b. The Equity Shares of the Company have voting rights and are subject to the preferential rights as prescribedunder law or those of the preference shareholders, if any. The Equity Shares are also subject to restrictions asprescribed under the Companies Act, 1956.

c. Shares held by Holding /Ultimate Holding Company and /or its subsidiaries /associates:

Out of total equity shares issued by the Company, shares held by its holding company, ultimate holding companyand its subsidiaries/associates are as below:Particulars As at 31st March, 2013 As at 31st March, 2012


Tata Chemicals Limited 97,341,610 973.42 97,341,610 973.42(Holding Company)

d. Details of shareholders holding more than 5% shares in the Company:

Particulars As at 31st March, 2013 As at 31st March, 2012

No. of Shares % Holding No. of Shares % Holding

Tata Chemicals Limited 97,341,610 50.06% 97,341,610 50.06%

Rakesh Jhunjhunwala 19,507,820 10.03% 12,416,820 6.38%

61

e. Aggregate number of bonus shares issued, shares issued for consideration other than cash and sharesbought back during the period of five years immediately preceeding the reporting date:

2012-13 2011-12 2010-11 2009-10 2008-09

Equity Shares :

Bonus Shares issued * - - 6,482,296 - -

Preference Shares :

7.50% Cumulative Reedeemable - - 88,000,000 -Preference Shares of ` 10 each Redeemed

* 6,482,296 shares of ` 10 each were issued as Bonus Shares by way of capitalisation of ` 648.23 lacs out of CapitalRedemption Reserve.

f. As per records of the company, no calls remain unpaid by the directors and officers of the Company as on31st March, 2013.

3 RESERVES AND SURPLUS:` lacs

As at As at As at As at1st April, Additions Deductions 31st March, 1st April, Additions Deductions 31st March,

2012 2013 2011 2012

Capital Reserve 1,243.10 - - 1,243.10 1,243.10 - - 1,243.10

Capital Redemption Reserve 8,151.77 - - 8,151.77 8,151.77 - - 8,151.77

Securities Premium Account 8,793.88 - - 8,793.88 8,793.88 - - 8,793.88

Debenture Redemption Reserve 2,500.00 1,250.00 - 3,750.00 1,250.00 1,250.00 - 2,500.00

Other Reserves :

Capital Subsidy 63.58 - - 63.58 63.58 - - 63.58

General Reserve 8,528.14 1,193.81 - 9,721.95 7,514.24 1,013.90 - 8,528.14

Hedging Reserve Account(Refer Note No. 42) (63.40) - (63.40) - 73.66 - 137.06 (63.40)

29,217.07 2,443.81 (63.40) 31,724.28 27,090.23 2,263.90 137.06 29,217.07

Surplus in the Statement ofProfit and Loss

Balance as per last financialstatements 24,203.26 - - 24,203.26 21,300.57 - - 21,300.57

Net Profit For the current year - 11,938.08 - 11,938.08 - 10,138.96 - 10,138.96

Debenture Redemption Reserve - - 1,250.00 (1,250.00) - - 1,250.00 (1,250.00)

Interim Dividend on Equity Shares - - 1,944.69 (1,944.69) - - 1,944.69 (1,944.69)

Distribution Tax on Interim Dividend - - 315.48 (315.48) - - 315.48 (315.48)

Proposed Equity Dividend - - 2,528.10 (2,528.10) - - 2,333.63 (2,333.63)

Distribution Tax on ProposedEquity Dividend - - 429.65 (429.65) - - 378.57 (378.57)

Transfer to General Reserves - - 1,193.81 (1,193.81) - - 1,013.90 (1,013.90)

Net Surplus in the Statement

of Profit and Loss24,203.26 11,938.08 7,661.73 28,479.61 21,300.57 10,138.96 7,236.27 24,203.26

53,420.33 14,381.89 7,598.33 60,203.89 48,390.80 12,402.86 7,373.33 53,420.33


62

RALLIS


5 OTHER LONG-TERM LIABILITIES:` lacs

As at As at31st March, 31st March,

2013 2012

Advances from customers 588.21 383.00

Total 588.21 383.00

4 LONG-TERM BORROWINGS:` lacs


2013 2012

SecuredDebentures (see note a,b & c below) - 7,500.00

- 7,500.00

UnsecuredDeferred payment liabilitiesi. Sales Tax Deferral Scheme (see note d below) 766.87 627.68ii. Council of Scientific & Industrial Research loan 75.32 85.48

(see note d below)842.19 713.16

Total 842.19 8,213.16

a. 750 (Previous Year: 750) 9.05% Secured Redeemable Non-Convertible Debentures (2010-11 Series 1) having aface value of ` 10 lacs each redeemable at par on 29th October, 2013.

b. These Non Convertible Debentures are secured by a first pari-passu mortgage over factory building and certainplant and machinery of Ankleshwar and Lote units.

c. The Company can repurchase some or all of the debentures at any time prior to date of redemption. TheCompany has the right to re-issue debentures bought back subject to provisions of the Companies Act, 1956.

d. Details of terms of repayment: (` lacs)

Particulars Repayment Schedule As at 31st March, 2013 As at 31st March, 2012

Sales Tax Deferral Scheme - Akola Varied Annual Installments 218.97 331.84from 2013-14 to 2015-16

Sales Tax Deferral Scheme - Lote* Varied Annual Installments 616.24 497.46from 2018-19 to 2026-27

Council of Scientific & Industrial Varied Annual Installments 94.15 107.70Research loan from 2013-14 to 2017-18

* Loan disclosed above is considered as per SICOM scheme, although the matter is in dispute with the Sales TaxTribunal.

63

6 LONG-TERM PROVISIONS:` lacs


2013 2012

Provision for employee benefitsCompensated Absences 355.71 332.82Supplemental Payments on Retirement 1,426.60 1,349.23

OthersFringe Benefit Tax 11.29 11.29Provision for Income Tax (net of advance tax) 1,160.53 1,160.53

Total 2,954.13 2,853.87

7 SHORT-TERM BORROWINGS:` lacs


2013 2012

SecuredLoans repayable on demand from banks* - 3,122.04

Total - 3,122.04

* These loans have been secured by a first charge by way of hypothecation of stocks and receivables. Thehypothecation also extends to guarantees issued by the Company’s Bankers in the ordinary course of business.

8 OTHER CURRENT LIABILITIES:` lacs


2013 2012

Other Liabilities

i. Current maturity of long term debt

Sales Tax Deferral Scheme (unsecured) (refer note 4 d) 68.34 201.62

Council of Scientific & Industrial Research loan (unsecured) (refer note 4 d) 18.83 22.22

Debentures ((Secured) Refer Note a,b & c in Note 4) 7,500.00 -

ii. Interest accrued but not due on borrowings 5.14 23.95

iii. Unpaid dividends 96.18 78.50

iv. Other Payables:

Provident Fund and other employee deductions 113.98 111.81

Customer Advances and Deposits 3,550.35 4,776.42

Creditors for Capital Purchases 542.58 1,011.68

Central Excise, Customs Duty, VAT and Service Tax payable 283.94 309.93

Tax deducted at source 68.06 43.57

Total 12,247.40 6,579.70


64

RALLIS


9 SHORT-TERM PROVISIONS:` lacs


2013 2012

a. Provision for employee benefits

Gratuity 99.19 230.18

Compensated Absences 57.99 93.79

Supplemental Payments on Retirement 150.86 145.43

b. Others

Proposed Equity Dividend 2,528.10 2,333.63

Distribution Tax on Proposed Equity Dividend 429.65 378.57

Provision for Income Tax (net of advance tax) 414.15 -

Total 3,679.94 3,181.60

10 FIXED ASSETS:` lacs

Gross Block (At Cost) Accumulated Depreciation/Amortisation Net Block

Balance as at Additions Disposals Balance as at Balance as at Depreciation On disposals/ Balance as at Balance as at Balance as at1st April 31st March 1st April charge Adjustment 31st March 31st March 31st March

2012 2013 2012 for the year 2013 2013 2012

a Tangible Assets

Freehold Land 254.15 - - 254.15 - - - - 254.15 254.15

Leasehold Land (Refer footnote 4) 4,601.71 36.57 - 4,638.28 195.41 46.26 - 241.67 4,396.61 4,406.30

Buildings (Refer footnote 1 & 2) 14,841.75 563.02 536.65 14,868.12 2,328.44 417.61 251.29 2,494.76 12,373.36 12,513.31

Plant and Equipment 30,146.21 4,263.92 2,672.39 31,737.74 13,086.92 2,208.62 1,981.74 13,313.80 18,423.94 17,059.29

Furniture and Fixtures 565.75 192.49 9.47 748.77 322.07 35.77 8.78 349.06 399.71 243.68

Vehicles 1,021.00 - 435.50 585.50 489.78 84.31 290.04 284.05 301.45 531.22

Office Equipment 263.15 160.80 6.21 417.74 112.09 25.16 4.15 133.10 284.64 151.06

Total 51,693.72 5,216.80 3,660.22 53,250.30 16,534.71 2,817.73 2,536.00 16,816.44 36,433.86 35,159.01

b Intangible Assets

Goodwill 163.63 - - 163.63 163.63 - - 163.63 - -

Computer software 939.83 58.07 - 997.90 893.08 46.39 - 939.47 58.43 46.75

Product Registrations 493.25 727.40 - 1,220.65 493.25 16.93 - 510.18 710.47 -

Total 1,596.71 785.47 - 2,382.18 1,549.96 63.32 - 1,613.28 768.90 46.75

Total Fixed Assets 53,290.43 6,002.27 3,660.22 55,632.48 18,084.67 2,881.05 2,536.00 18,429.72 37,202.76

Previous Year 38,274.83 16,509.42 1,493.82 53,290.43 16,707.45 2,711.08 1,333.86 18,084.67 35,205.76

Footnotes:1. Cost of buildings includes cost of 45 shares (Previous Year 50 shares) of ` 50 each fully paid and cost of 5 shares (Previous Year 5 shares) of ` 100 each fully paid in respect of ownership flats in 6 (Previous Year 7) Co-operative Societies.2. Buildings include an asset having gross block of ` 156.96 lacs (Previous Year ` 169.29 lacs) and net block of ` 105.42 lacs (Previous Year ` 116.06 lacs) where the conveyance in favour of the Company is not completed.3. Fixed assets include ` 425.42 lacs (Previous Year ` 434.98 lacs) representing the book value of assets held for disposal. The Management expects to recover amounts higher than the carrying value of these assets.4. Leasehold land include ` 1,708 lacs, for which the Company has made representation with Government Agencies regarding fulfilment of pre-conditions of lease upon expiry of timeline.

65

11 NON-CURRENT INVESTMENTS:` lacs

Nominal Nos. As at As atValue 31st March, 31st March,(in `) 2013 2012

A. Trade Investments (Valued at cost less provision for diminution)Unquoted equity instruments - Fully paid up:a. Investment in Subsidiaries:

Zero Waste Agro Organics Pvt. Ltd. 10 12,956 1,000.07 -Rallis Chemistry Exports Ltd. 10 50,000 5.00 5.00Metahelix Life Sciences Ltd. 10 82,796 16,369.62 15,819.82

A 17,374.69 15,824.82b. Others:

Aich Aar Chemicals Pvt. Ltd. 10 124,002 9.31 9.31Biotech Consortium India Ltd. 10 50,000 5.00 5.00Indian Potash Ltd. 10 54,000 0.90 0.90Bharuch Enviro Infrastructure Ltd. 10 36,750 3.68 3.68Bharuch Eco-Acqua Infrastructure Ltd. 10 300,364 30.03 30.03Sipcot Industries Common Utilities Ltd. 100 113 NIl NIlPatancheru Enviro-Tech Ltd. 10 10,822 1.08 1.08Advinus Therapeutics Ltd. 10 18,286,000 1,828.60 1,828.60

1,878.60 1,878.60Less: Provision for diminution in value 9.30 9.30

B 1,869.30 1,869.30

C=A+B 19,243.99 17,694.12

B. Other Investments (Valued at cost less provision for diminution)a. Investments in equity instruments - Fully paid up (Quoted)

Spartek Ceramics India Ltd. 10 7,226 Nil NilNagarjuna Finance Ltd. 10 400 Nil NilPharmaceuticals Products of India Limited 10 10,000 Nil NilBallasore Alloys Ltd. (Previously known as Ispat Alloys Ltd.) 10 504 Nil NilJ.K.Cement Ltd. 10 44 Nil NilUniscans & Sonics Ltd. 10 96 Nil Nil

D - -

b. Investments in equity instruments - Fully paid up (Unquoted)Amba Trading Company Limited 10 130,000 53.32 53.32Associated Inds. (Assam) Ltd. 10 30,000 Nil NilCaps Rallis (Private) Ltd. (Nominal value of Zim. $ 2 each) 2,100,000 146.30 146.30

199.62 199.62Less: Provision for diminution in value 199.62 199.62

E - -F=D+E - -

c. Investments in Debentures or Bondsi. Unquoted-Fully Paid

4.25% Advinus Therapeutics Ltd. - Non ConvertibleDebentures (Refer Note No. 46) 1,000 10,384 - 103.84

G - 103.84ii. Quoted-Fully Paid

14% Spartek Ceramics India Limited-Debentures -Redeemable Partly Convertible (`1) 60 560 Nil Nil

H - -

I=G+H - 103.84

J=I+F+C 19,243.99 17,797.96Aggregate Book Value of Investments:Unquoted - At cost less Provision for diminution in value 19,243.99 17,797.96Quoted - At cost less Provision for diminution in value - -

19,243.99 17,797.96Footnotes:Market value of quoted investments ` 0.59 lacs (Previous Year ` 0.57 lacs).


66

RALLIS


12 LONG-TERM LOANS AND ADVANCES:(Unsecured, considered good unless otherwise stated)

` lacs


2013 2012

Capital Advances 144.54 150.21Security Deposits 555.52 706.65Other Loans and Advances 361.84 457.86Advance Income Tax (net of provisions) 7,613.15 7,573.79

Total 8,675.05 8,888.51

13 OTHER NON-CURRENT ASSETS:` lacs


2013 2012

Interest accrued on long term investments - 20.90

Total - 20.90

14 CURRENT INVESTMENTS:(Refer Note No. 46)

` lacs

Nominal value Numbers As at As at(in `) 31st March, 31st March,

2013 2012

Investments in Debentures (Unquoted-Fully Paid)Current portion of 4.25% Advinus Therapeutics Pvt. Ltd. -Non Convertible Debentures 1,000 10,384 103.84 296.14

Total 103.84 296.14

15 INVENTORIES:(Valued at the lower of cost and net realisable value)

` lacs


2013 2012

a. Raw Materials and components (Includinggoods-in transit of ` 965.96 lacs; Previous year ` 3,209.95 lacs) 6,402.47 7,510.56

b. Work-in-progress (Pesticides) 666.62 900.27

c. Finished goods (excluding finished goods traded in) 9,074.43 10,952.71(Refer Note No. 36(a))

d. Stock in trade (in respect of goods acquired for trading) 2,009.84 2,316.77(Refer Note No. 36(b))

e. Stores and spares 109.12 74.46

f. Packing Materials 772.51 661.38

Total 19,034.99 22,416.15

67

16 TRADE RECEIVABLES:` lacs


2013 2012

Trade receivables outstanding for a period less than six monthsSecured, considered good 772.23 309.58Unsecured, considered good 13,507.55 7,881.25

14,279.78 8,190.83

Trade receivables outstanding for a period exceeding six monthsSecured, considered good 4.55 11.00Unsecured, considered good 91.73 7.45Doubtful 272.04 549.49Less: Provision for doubtful debts (272.04) (549.49)

96.28 18.45

Total 14,376.06 8,209.28

17 CASH AND CASH EQUIVALENTS:(including other Bank Balances)

` lacs


2013 2012

Cash and Cash equivalentsa. Balances with banks in Current accounts 1,432.28 774.75b. Cash on hand 3.02 3.07C. Deposits with less than 3 months maturity 765.36 7.02

2,200.66 784.84

Other Bank Balancesa. Balances held for unpaid dividends 96.18 78.50b. Bank deposits as margin money against Bank Guarantees

146.80 191.54

242.98 270.04

Total 2,443.64 1,054.88

18 SHORT-TERM LOANS AND ADVANCES:(Unsecured, considered good unless otherwise stated) ` lacs


2013 2012

a. Advances Recoverable in Cash or in Kind 1,115.37 2,282.55b. Advances/Deposits considered doubtful of recovery*

Doubtful 4,523.28 4,523.28Less: Provision for doubtful loans and advances (4,523.28) (4,523.28)

- -c. Balances with Government Authorities 1,507.14 1,443.34d. Gratuity 6.97 -

Total 2,629.48 3,725.89

* Includes a sum of ` 18.61 lacs (Previous Year ` 18.61 lacs) being amount due from Rallis Chemistry Exports Ltd., a whollyowned subsidiary. The maximum amount outstanding during the year was ` 18.61 lacs (Previous Year ` 18.61 lacs).


68

RALLIS


19 OTHER CURRENT ASSETS:` lacs


2013 2012

Interest on current maturity of Debentures 26.60 54.51Interest on current maturity of fixed deposit 6.43 5.09Export benefits receivable 231.81 232.31

Total 264.84 291.91

20 REVENUE FROM OPERATIONS:` lacs

For the year ended For the year ended31st March, 2013 31st March, 2012

Sale of products (Refer Note No. 34)Own Manufactured Goods 122,395.64 113,431.17Traded Goods 17,718.05 10,062.98

Sale of services 81.76 12.78Other operating revenues

Scrap and Sundry Sales 972.21 992.36Export Incentives 415.87 742.27Discounts Earned 119.07 120.89Royalty Income 149.74 202.69Others 5.67 442.05

141,858.01 126,007.19Less : Excise duty 9,479.79 7,882.19

Total 132,378.22 118,125.00

21 OTHER INCOME:

` lacs


Interest Income on term and fixed deposits 18.94 16.02Interest on loans and advances 33.33 19.03Interest from Investments

On current investments 39.55 38.38On long term investments - 8.51

Dividend incomeOn current investments 85.71 21.48On long term investments 1.90 1.72

Surplus on Liquidation of Subsidiary - 107.69Profit on sale of Fixed Assets (net) 689.21 224.49Sundry Income 276.81 312.53

Total 1,145.45 749.85

69

22 COST OF MATERIALS CONSUMED:` lacs


Raw Materials Consumed (Refer Notes No. 35 and 39)Opening Stock 7,510.56 6,071.16Add : Purchases 62,646.41 59,061.72Less : Closing Stock 6,402.47 7,510.56

63,754.50 57,622.32Packing Materials Consumed (Refer Note No. 39) 4,812.26 4,440.89

Total 68,566.76 62,063.21

23 CHANGES IN INVENTORIES OF FINISHED GOODSWORK-IN-PROGRESS AND STOCK-IN-TRADE:

` lacs


Opening StockFinished Goods - Own Manufactured 10,952.71 12,484.54Finished Goods - Traded 2,316.77 697.35Work in progress 900.27 605.16

14,169.75 13,787.05Closing Stock

Finished Goods - Own Manufactured 9,074.43 10,952.71Finished Goods - Traded 2,009.84 2,316.77Work in progress 666.62 900.27

11,750.89 14,169.75

Net decrease/(Increase) 2,418.86 (382.70)

24 EMPLOYEE BENEFITS EXPENSE:(Refer Note No. 44)

` lacs


(a) Salaries and Wages 6,438.20 6,514.06(b) Contribution to Provident and Other Funds 408.53 413.78(c) Gratuity 90.50 271.61(d) Staff welfare 847.06 833.90

Total 7,784.29 8,033.35


70

RALLIS


25 OTHER EXPENSES:` lacs


Freight, Handling and Packing 3,080.26 2,579.03

Processing 742.79 636.99

Changes in Excise Duty on Inventory of Finished Goods (138.74) 199.05

Travelling 796.79 669.78

Power and Fuel 4,762.41 4,275.75

Brand Equity Contribution 180.41 156.60

Repairs :

to Machinery 678.80 552.06

to Buildings 96.16 110.99

Others 255.74 406.26

Stores and Spares Consumed (Refer Note No. 39) 500.32 487.81

Rates and Taxes 216.22 294.07

Bad Debts 303.45 320.45

Cash Discount 873.66 1,326.80

Commission 66.60 53.30

Insurance 197.52 179.97

Rent 1,068.09 746.85

Bank Charges 211.80 250.24

Directors’ Fees & Commission 335.75 288.85

Provision for Doubtful Debts/Advances 26.00 -

Less : Provision for doubtful debts written back (303.45) (320.45)

Selling Expenses 2,041.04 1,656.37

Legal and Professional 573.73 518.55

Net loss on Foreign currency transactions and translation 430.35 994.99

(other than considered as finance cost)

Pre-operative Expenses Capitalised - (150.62)

Other Expenses (Refer Note No. 29) 3,856.79 3,238.49

Total 20,852.49 19,472.18

26 FINANCE COSTS :` lacs


Interest expense on:

Borrowings 1,053.73 841.13

Other interest 130.99 144.01

Net (gain)/Loss on Foreign Currency transactions and translation 66.77 52.01

Total 1,251.49 1,037.15

71

27 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) :(i) Contingent Liabilities:

` lacs

Particulars 2012-13 2011-12

a. Claims against the Company not acknowledged as debts:

- Sales Tax 2,000.40 2,158.63

- Excise Duty 360.84 360.84

- Customs Duty 144.10 149.50

- Income Tax 6,838.48 6,655.04

- Service Tax 65.21 42.14

- Property Cases 47.36 47.36

- Labour Cases 109.00 109.00

- Other cases 109.56 472.01

- Number of cases where amount is not quantifiable 41 Nos.(Previous Year 41 Nos.)

b. Guarantees # - 3.10

c. Other money for which the company is contingently liable:

- Bills Discounted (fully covered by buyer’s letters of credit) 1,547.36 104.10

11,222.31 10,101.72

Notes :

(i) # Other guarantees issued by Bank for which the Company is contingently liable. These are covered by thecharge created in favour of Company’s bankers by way of hypothecation of stock and debtors.

(ii) The Company does not expect any liability in respect of items (a), (b) and (c ) to devolve in respect of itsexposure and therefore no provision has been made in respect thereof.

(ii) Other Commitments :

(A) During the financial year 2010-11, the Company had acquired a majority of the equity shares of MetahelixLife Sciences Limited (Metahelix). Besides, the shares already acquired, it has made the followingcommitments:

(a) to acquire shares from certain shareholders (other than founder shareholders) 2,591 equity shares foran amount aggregating ` 506.77 lacs. (previous year 2,591 equity shares held by them for an amountaggregating ` 506.77 lacs.)

(b) to allow the founder shareholders, a put option exercisable over a period of 3 years (Previous Year: 4years), 8,433 shares held by them for an amount aggregating ` 1,649.11 lacs (Previous Year: 11,244shares for an amount aggregating ` 2,199.21 lacs).

At the end of 3 years, the Company has a call option to acquire the balance shares held by the foundershareholders, at the fair market value as at the date of exercise.

(B) During the financial year 2012-13, the Company has acquired 12,956 equity shares of Zero Waste AgroOrganics Private Limited (ZWAOPL) for an amount aggregating to ` 1,000.07 lacs. Besides, the sharesalready acquired, it has made the following commitments:

(a) Investment of ` 1,900.03 lacs in respect to ZWAOPL effectively taking the shareholding of Rallis to50.06%.

(C) Estimated amount of contracts remaining to be executed on capital account of tangible assets is ` 934.83lacs (Previous Year ` 1,848.66 lacs) against which advances paid aggregate ` 144.54 Lacs (Previous Year` 150.21 lacs) and Intangible assets is ` 12.80 lacs (Previous Year ` 95.79 lacs).

(D) For derivatives and lease commitments, refer note no 42 and 28 respectively.


72

RALLIS


28 The Company has procured motor vehicles under non-cancellable operating leases. Lease rent chargedto the Statement of Profit and Loss during the year is ` 427.84 lacs (Previous Year ` 203.53 lacs) net of amountrecovered from employees ` 3.59 lacs (Previous Year ` 2.34 lacs). Disclosures in respect of non-cancellable leases aregiven below:

` lacs


a) Total of minimum lease payments 1,225.75 1,236.64

b) The total of future minimum lease payments under non-cancellableoperating leases for a period:

Not later than one year 470.00 372.26

Later than one year and not later than five years 755.75 864.38

c) Lease payments recognised in the statement of profit and loss for the year 427.84 203.53

The terms of operating lease do not contain any exceptional / restrictive covenants. Premises are taken by theCompany on operating leases that are cancellable.

29 OTHER EXPENSES INCLUDE AUDITORS’ REMUNERATION AS UNDER:` lacs


Audit Fees 55.20 46.98

Tax Audit 10.00 10.00

Fees for other services 57.08 49.20

Reimbursement of out-of-pocket expenses 1.53 0.82

Service tax which is being claimed for set-off as input credit has not been included in the expenditure above.

30 The Company has incurred the following expenses on research and development activity:` lacs


On tangible fixed assets 1,463.94 5.30

On items which have been expensed during the year 891.70 899.04

Total 2,355.64 904.34

During the year the Company has also incurred ` 919.94 lacs (Previous Year ` 471.14 lacs) towards developmentexpenditure which is included under Intangible Assets under Development/Capital work in progress. The totalamount included in Intangible Assets under Development/Capital work in progress as at 31st March 2013 is` 1,094.17 lacs (Previous Year ` 1,638.98 lacs).

Included in the foregoing is an amount of ` 422.69 lacs (Previous Year ` 582.94 lacs) paid to an external agency.

73

31 DEFERRED TAX ASSETS AND LIABILITIES:(a) The components of deferred tax assets and liabilities are as under:

` lacs


Deferred Tax AssetsOn Provision against debts and advances 1,629.93 1,646.01On other items 639.56 772.63

Total 2,269.49 2,418.64

Deferred Tax LiabilitiesOn fiscal allowance on fixed assets 4,888.74 3,422.25On other items 244.88 304.85

Total 5,133.62 3,727.10

Net Deferred Tax Asset / (Liability) Recognised (2,864.13) (1,308.46)

(b) Deferred tax charge for the year: ` lacs


Opening Net Deferred Tax Asset (1,308.46) (322.98)

Less: Closing Net Deferred Tax Liability (2,864.13) (1,308.46)

Less: Debited to Hedging Reserve Account (30.45) 65.83

Deferred Tax charge for the year 1,529.18 1,051.31

32 OTHER LIABILITIES INCLUDE PROVISION HELD IN RESPECT OF INDIRECT TAX MATTERS IN DISPUTE:` lacs


Opening Balance as at 1st April 185.21 185.21

Additional provisions made during the year - -

Total 185.21 185.21

Payments made adjusted against above sum - -

Closing Balance as at 31st March 185.21 185.21

33 SEGMENT REPORTING:Segment information has been presented in the Consolidated Financial Statements as permitted by AccountingStandard (AS-17) on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

34 TURNOVER:

Particulars Units 2012-13 2011-12

Quantity ` lacs Quantity ` lacs

Agri inputs Tonnes 13,616134,090.93

14,346119,967.56

KL. Ltr 9,180 10,153Plant Growth Nutrients Tonnes 3,052

4,495.341,712

2,519.95KL. Ltr 331 156

Seeds Tonnes 1,100 1,011.03 414 1,006.64Agri services Tonnes 8

516.39Nos. 2

140,113.69 123,494.15Less:- Excise Duty 9,479.79 7,882.19

Net Turnover 130,633.90 115,611.96

} }} }

}


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35 QUANTITATIVE AND VALUE ANALYSIS OF MATERIALS CONSUMED:

Particulars Units 2012-13 2011-12

Quantity ` lacs Quantity ` lacs

Active Ingredients for pesticides Tonnes/KL 5,136 27,678.22 5,510 26,955.02Other Chemicals Tonnes 43,054 35,789.12 42,279 30,613.26

KL 278 287.16 588 54.04

63,754.50 57,622.32

36 (a) LICENSED / INSTALLED CAPACITIES, PRODUCTION AND STOCKS OF GOODS MANUFACTURED:

Particulars Units Installed Production Opening Stocks Closing Stocks

Capacity Quantity Quantity ` lacs Quantity ` lacs

Agri inputs Tonnes 22,020 11,357 1,216 7,498.85 909 5,613.79

Tonnes 15,225 11,266 2,271 9,185.55 1,216 7,498.85

Liquids KL 13,000 7,695 874 3,278.57 588 3,079.65

KL 13,500 9,456 1070 3,037.07 874 3,278.57

Plant Growth Nutrients Tonnes N.A. 3,086 259 175.29 302 380.99

Tonnes N.A. 1,542 402 261.92 259 175.29

Total 10,952.71 9,074.43

12,484.54 10,952.71Footnotes:(i) Licensed Capacity – Delicensed vide Gazette Notification No. S.O.477 (E) dated 25.07.1991.(ii) Figures in italics are in respect of the previous year.(iii) Production figures are net of captive consumption and exclude by-products.(iv) Production includes quantities manufactured at sub-contracting plants. Installed capacity represents capacity

installed at the Company’s facilities.(v) N.A. = Not Applicable.

(b) PURCHASE AND STOCK OF GOODS TRADED:

Particulars Units Purchases Opening Stocks Closing Stocks

Qty ` lacs Qty ` lacs Qty ` lacs

Pesticides Tonnes 1,923 2,438.10 180 577.15 149 249.46

KL 1,207 8,344.80 71 1,539.25 95 1,334.55

Tonnes 2,122 2,107.33 84 173.18 180 577.15

KL 525 5,964.00 39 475.21 71 1,539.25

Plant Growth Nutrients Tonnes 27 10.61 4 0.15 16 7.86

KL 331 546.31 40 71.98 40 63.55

Tonnes - 3.30 28 5.36 4 0.15

KL 189 354.51 8 16.26 40 71.98

Seeds Tonnes 1,259 769.14 49 128.24 104 313.67

Tonnes 575 783.59 48 27.34 49 128.24

Agri Services Tonnes 8,507 259.63 - - 258 6.05

Nos 4,930 64.73 - - 2,714 34.70

Total 12,433.32 2,316.77 2,009.84

9,212.73 697.35 2,316.77

Figures in italics are in respect of the previous year.

75

37 VALUE OF IMPORTS ON C. I. F. BASIS:` lacs


Raw Materials 40,538.76 35,481.13

Stores, spare parts and packing materials 63.67 35.19

Capital Goods 77.95 115.76

Total 40,680.38 35,632.08

38 EXPENDITURE IN FOREIGN CURRENCIES:` lacs


Interest 7.94 9.65

Professional Fees 93.63 90.16

Processing - 24.86

Commission 57.13 43.61

Travelling 25.40 24.39

Research and Development 0.49 1.33

Handling and other selling expenses 15.03 2.91

Subscription 7.98 13.97

Bank Charges 13.40 14.55

Others 5.26 10.88

Total 226.26 236.31

39 VALUE OF IMPORTED AND INDIGENOUS MATERIALS CONSUMED:` lacs


Amount % Amount %

Raw Materials

Imported (including Customs Duty) 40,149.25 63% 35,565.39 62%

Indigenous 23,605.25 37% 22,056.93 38%

Total 63,754.50 100% 57,622.32 100%

Packing Materials

Imported (including Customs Duty) - - - -

Indigenous 4,812.26 100% 4,440.89 100%

Total 4,812.26 100% 4,440.89 100%

Spare Parts & Components

Imported (including Customs Duty) 36.83 7% 30.34 6%

Indigenous 463.49 93% 457.47 94%

Total 500.32 100% 487.81 100%


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40 EARNINGS IN FOREIGN EXCHANGE:` lacs


Export of goods on F. O. B. Basis 41,524.33 38,139.73

Royalty Income 149.74 202.69

Freight, insurance and other matters 308.70 286.00

Surplus on Liquidation of Subsidiary - 107.69

Total 41,982.77 38,736.11

41 EARNINGS PER SHARE:` lacs



Weighted average No. of Equity Shares for Basic / Diluted EPS (Nos) 19,44,68,890 19,44,68,890

Nominal Value of Equity Per Share (in `) 1.00 1.00

Basic / Diluted Earning Per Share (in `) 6.14 5.21

42 FOREIGN CURRENCY EXPOSURES :-

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forwardcontracts and currency option contracts to manage its exposure in foreign exchange rate variations. The counterparty is generally a bank. These contracts are for a period between one day and four years.

Derivative Instruments:

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuationsrelating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts isgoverned by the Company’s strategy approved by the Board of Directors, which provide principles on the use ofsuch forward contracts consistent with the Company’s Risk Management Policy. The Company does not use forwardcontracts for speculative purposes.

(a) The following derivative instruments are outstanding as at balance sheet date:

i) Outstanding Forward Exchange Contracts entered into by the Company:

Particulars As at 31.03.2013 As at 31.03.2012

No of ` lacs Amount No of ` lacs AmountContracts in lacs Contracts in lacs

Receivables 6 1,711.34 USD 31.52 10 2,986.36 USD 58.70

2 434.88 AUD 7.68 1 172.49 AUD 3.30

Payables 2 1,583.75 USD 29.17 26 4,869.91 USD 95.7

5 1,698.23 JPY 2944.10 6 1,878.44 JPY 3,031.60Note: USD = US Dollar; JPY = Japanese Yen; AUD = Australian Dollar.

77

ii) The following is the outstanding currency option contract, which has been designated as a Cash Flow Hedge:

Foreign Currency As at 31.03.2013 As at 31.03.2012

No of Notional Fair Value No of Notional Fair ValueContracts amount of Gain / (Loss) Contracts amount of Gain / (Loss)

currency currencyoption contracts ` lacs ` lacs

USD Nil Nil Nil 1 29.50 lacs (96.74)

USD = U.S. Dollar

The net loss on the derivative instrument of ` 63.40 lacs (net of Deferred Tax Asset of ` 30.45 lacs) recognised in2011-2012 in the Hedging Reserve Account has been recycled in the Statement of Profit and Loss in 2012-2013.

(b) The year end foreign currency exposures that were not hedged by a derivative instrument or otherwise aregiven below.

i) Amounts receivable in foreign currency on account of the following: -


` lacs Amount ` lacs Amountin lacs in lacs

Exports of goods and services USD 78.07 USD 26.10

4,052.19 AUD 5.35 1,625.85 AUD 5.50

EUR 0.47 EUR 0.10

ii) Amounts payable in foreign currency on account of the following: -



Imports of goods and services USD 99.98 USD 136.50

5,744.58 JPY 317.37 7,049.38 JPY 93.40

EUR 0.02 EUR 0.70

Customer Advances 175.04 USD 3.22 2.1 USD 0.05

Note: USD = US Dollar; EUR = Euro; JPY = Japanese Yen; AUD = Australian Dollar.

43 RELATED PARTY DISCLOSURES :

Disclosure as required by Accounting Standard (AS) - 18 “Related Party Disclosures” as prescribed under section 211(3C) of the Companies Act, 1956.

(a) Names of the related parties and description of relationship:

(i) Holding / Ultimate Holding Company : Tata Chemicals Limited

(ii) Subsidiary Companies: Rallis Chemistry Exports Ltd

Metahelix Life Sciences Ltd

Dhaanya Seeds Ltd

Zero Waste Agro Organics Pvt. Ltd. w.e.f 18th October,2012

Rallis Australasia Pty Ltd.(Liquidated on 25th January, 2012)

(iii) Key Management Personnel : Mr.V.Shankar - Managing Director & CEO


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b) Details of Transactions:` lacs

Nature of Transactions Holding Subsidiary Key TotalCompany Companies Management

Personnel

Purchase of Goods 126.77 802.04 - 928.81

200.95 302.70 - 503.65

Sales of Goods 2,773.38 53.28 - 2,826.66

2,721.94 182.65 - 2,904.59

Amount Received on liquidation - - - -

- 107.69 - 107.69

Services Received 32.42 - - 32.42

69.91 - - 69.91

Services Given 44.43 - - 44.43

28.01 - - 28.01

Investment in Subsidiary - 1,549.87 - 1,549.87

- 3,191.83 - 3,191.83

Other Expenses 12.63 58.13 - 70.76

0.03 0.90 - 0.93

Dividend Paid (Equity) 2,141.52 - - 2,141.52

2,044.17 - - 2,044.17

Debit Balance outstanding as at year end- Other Receivables 99.47 274.51 - 373.98

73.03 440.16 - 513.19

Credit Balance outstanding as at year end- Other Payables 7.03 - - 7.03

62.37 - - 62.37

Investment as at year end - 17,374.69 - 17,374.69

- 15,824.82 - 15,824.82

Remuneration Paid - - 241.73 241.73

- - 216.73 216.73

Figures in italics relate to the previous year.

79

Transactions included in (b) above which are in excess of 10% of the total related party transactions of the sametype are given below:

` lacs

Nature of Transactions Tata Rallis Rallis Dhaanya Zero Waste MetahelixChemicals Australasia Chemistry Seeds Agro Organics Life Sciences

Ltd. Pty. Ltd Exports Ltd Pvt Ltd Ltd

Purchase of Goods 126.77 - - 692.95 109.09 -

200.95 - - 302.70 - -

Sales of Goods 2,773.38 - - 53.28 - -

2,721.94 - - 182.65 - -

Amount Receivedon liquidation - - - - - -

- 107.69 - - - -

Services Received 32.42 - - - - -

69.91 - - - - -

Services Given 44.43 - - - - -

28.01 - - - - -

Other Expenses 12.63 - - 42.97 15.16 -

0.03 - - 0.90 - -

Investments in Subsidiary - - - - 1,000.07 549.80

- - - - - 3,191.83

Loans given - - - - - -

- - 18.61 - - -

Provisions for Loansgiven to subsidiary - - - - - -

- - 18.61 - - -

Dividend Paid (Equity) 2,141.52 - - - - -

2,044.17 - - - - -Figures in italics relate to the previous year.

44 EMPLOYEE BENEFIT OBLIGATIONS:Defined–Benefits Plans:The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount) anda supplemental pay scheme (a life long pension). The gratuity scheme covers substantially all regular employees,while supplemental pay plan covers certain executives. In the case of the gratuity scheme, the Company contributesfunds to Gratuity Trust, which is irrevocable, while the supplemental pay scheme is not funded. Commitments areactuarially determined at year-end. The actuarial valuation is done based on “Projected Unit Credit” method. Gainsand losses of changed actuarial assumptions are charged to the Statement of profit and loss.

The net value of the defined-benefit commitment is detailed below: ` lacsParticulars Gratuity Supplemental Total Gratuity Supplemental Total

(Funded Plan) Pay (Unfun- (Funded Plan) Pay (Unfun-ded Plan) ded Plan)

2012-13 2011-12

Present Value ofCommitments 1,537.94 1,577.46 3,115.40 1,402.76 1,494.66 2,897.42

Fair Value of Plans 1,445.72 - 1,445.72 1,172.57 - 1,172.57

Net liability in thebalance sheet 92.22 1,577.46 1,669.68 230.19 1,494.66 1,724.85


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Defined Benefit Obligation :` lacs

Particulars Gratuity Supplemental Total Gratuity Supplemental Total(Funded Plan) Pay (Unfun- (Funded Plan) Pay (Unfun-

ded Plan) ded Plan)

2012-13 2011-12

Opening balanceas at 1st April 1,402.76 1,494.66 2,897.42 1,471.98 1,562.49 3,034.47

Benefits earnedduring the year - - - - - -

Past Service Cost - - - - - -

Current Service Cost 130.88 124.96 255.84 113.17 10.31 123.48

Interest expenses 115.73 123.31 239.04 125.11 127.56 252.67

Paid benefits (98.08) (230.33) (328.41) (384.36) (144.18) (528.54)

Actuarial (gain) /loss (13.35) 64.86 51.51 76.86 (61.52) 15.34

Closing balance asat 31st March 1,537.94 1,577.46 3,115.40 1,402.76 1,494.66 2,897.42

Plan assets: Gratuity :` lacs


Opening balance as at 1st April 1,172.57 1,419.20

Expected return on scheme assets 100.84 113.52

Contributions by the Company 228.47 94.21

Paid funds (98.08) (384.36)

Actuarial gain / (loss) 41.92 (69.99)

Balance with the Trust as at 31st March 1,445.72 1,172.57

Closing balance as at 31st March 1,445.72 1,172.57

Investment Details:` lacs


Debentures 772.33 397.36

Equity - 258.57

Government Securities 350.53 305.33

Deposits, Money market Securities & Other Assets 95.12 47.74

Other – Fund managed by other insurer whose pattern of investment is notavailable with the Company 153.41 89.19

Others 74.33 74.38

Total Asset 1,445.72 1,172.57

The plan assets are managed by the Gratuity Trust formed by the Company. The management of funds is entrustedwith the Life Insurance Corporation of India and HDFC Standard Life Insurance Company Limited.

81

Return on plan assets: - Gratuity` lacs


Expected return on plan assets 100.84 113.52


Actual return on plan assets 142.76 43.53

Expenses on defined benefit plan:` lacs


ded Plan) ded Plan)

2012-13 2011-12

Current service costs 130.88 124.96 255.84 113.17 10.31 123.48

Past service cost - - - - - -

Interest expense 115.73 123.31 239.04 125.11 127.56 252.67

Expected return oninvestment (100.84) - (100.84) (113.52) - (113.52)

Net actuarial (gain)/ loss (55.27) 64.86 9.59 146.85 (61.52) 85.33

Expenses charged 90.50 313.13 403.63 271.61 76.35 347.96to the statement ofprofit and loss

The actuarial calculations used to estimate defined benefit commitments and expenses are based on the followingassumptions which if changed, would affect the defined benefit commitment’s size, funding requirements andpension expense.


Rate for discounting liabilities 8.10% p.a. 8.25% p.a.Expected salary increase rate 8.00% p.a. 8.00% p.a.Expected return on scheme assets 8.70% p.a. 8.60% p.a.Mortality rates Indian Assured LIC 1994-96

Lives Mortality ultimate table(2006-08)Ultimate

The estimates of future salary increases, considered in the actuarial valuation, take into account inflation, seniority,promotions and other relevant factors such as supply and demand in the employment market.

Experience adjustment:

(a) Gratuity:` lacs

Particulars 2012-13 2011-12 2010-11 2009-10 2008-09

Defined benefit obligation 1,537.94 1,402.76 1,471.98 1,501.24 1,238.59

Plan asset 1,445.72 1,172.57 1,419.20 1,341.60 605.77

Surplus/(Deficit) (92.22) (230.19) (52.78) (159.64) (632.82)

Experience adjustment onplan assets gain/(loss) 41.92 (69.99) (3.27) (34.54) (146.09)

Experience adjustment onplan liabilities (gain)/loss (13.35) 76.86 (72.57) (19.50) 25.81


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(b) Supplemental Pay:` lacs

Particulars 2012-13 2011-12 2010-11 2009-10 2008-09

Defined benefit obligation 1,577.46 1,494.66 1,562.49 1,572.68 1,567.17

Plan asset - - - - -

Surplus/(Deficit) (1,577.46) (1,494.66) (1,562.49) (1,572.68) (1,567.17)

Experience adjustment onplan assets gain/(loss) - - - - -

Experience adjustment onplan liabilities (gain)/loss 64.86 (61.52) 21.19 63.94 (79.49)

*The figures in respect of previous one period is not available.

The contributions expected to be made by the Company during the financial year 2013-14 amount to ` 99.19 lacs(Previous year ` 230.18 lacs)

Defined-Contribution Plans:

Amount recognised as expense and included in the Note 24 — “Contribution to Provident and Other Funds” —` 408.53 lacs (Previous Year ` 413.78 lacs).

45 TRADE PAYABLE INCLUDES AMOUNT PAYABLE TO MICRO, SMALL AND MEDIUM ENTERPRISES AS FOLLOWS:

a The total amount of delayed payments during the year aggregate ` 14.94 lacs in respect of 7 parties withamounts ranging from ` 0.03 lacs to ` 4.01 lacs. (Previous Year ` 37.62 lacs in respect of 7 parties with amountsranging from ` 0.57 lacs to ` 17.11 lacs).

b The amount of principal outstanding in respect of the above as at Balance Sheet date is ` 596.34 lacs in respectof 31 parties (Previous Year ` 379.67 lacs in respect of 28 parties with amounts ranging from ` 0.02 lacs to ` 166.60lacs) with amounts ranging from ` 0.13 lacs to ` 144.29 lacs.

c The total interest payable on account of delayed payment during the year is ` 0.03 lacs. The Company has madepayment of ` 0.14 lacs during the year. The total interest payable aggregates ` Nil (Previous Year ` 0.12 lacs) andthis entire amount was paid, outstanding balance as at the year end is Nil.

46 The Company has invested ` 880.00 lacs in Non-Convertible Debentures (“NCDs”) of Advinus Therapeutics Ltd.having a coupon rate of 4.25%. The NCDs will be redeemed between December 2010 and May 2013 at a premium of25%. Income recognised during the year includes ` 28.49 lacs (Previous Year ` 22.72 lacs) in respect of redemptionpremium determined on the basis of the internal rate of return. During the year debentures amounting to` 296.15 lacs (Previous Year ` 290.40 lacs) were redeemed at a 25% premium which aggregated ` 74.04 lacs(Previous Year ‘ 72.60 lacs).

47 During the year, the Company has acquired / subscribed to equity shares comprising 22.81% of the equity shares ofZero Waste Agro Organics Private Limited (ZWAOPL).

48 During the previous year, Rallis Australasia Pty. Ltd. a subsidiary of the Company has been liquidated. The Companyhas received an amount of ` 107.69 lacs as a surplus over its investment on account of liquidation.

49 Previous years’s figures have been regrouped / restated wherever necessary to conform to the classification of thecurrent year.

R. GOPALAKRISHNAN Chairman

B. D. BANERJEEE. A. KSHIRSAGARPRAKASH R. RASTOGI V. SHANKAR Managing Director & CEOBHARAT VASANI DirectorsK. P. PRABHAKARAN NAIRR. MUKUNDANYOGINDER K. ALAGH P. S. MEHERHOMJI Company Secretary


}

83

Balance Sheet Abstract & Company’s General Business Profile :-

I. Registration Details

Registration No. 1 4 0 8 3 State Code 1 1

Balance Sheet Date 3 1 0 3 2 0 1 3

Date Month Year

II. Capital Raised during the Year (Amount in ` Thousands)

Public Issue Rights Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III. Position of Mobilisation and Deployment of Funds (Amount in ` Thousands)

Total Liabilities (including Current Liabilities) Total Assets

1 0 6 6 3 8 2 7 1 0 6 6 3 8 2 7

Sources of Funds

Paid-up Capital Reserves & Surplus

1 9 4 4 7 1 6 0 2 0 3 8 9

Secured Loans Unsecured Loans

7 5 0 0 0 0 9 2 9 3 5

Deferred Tax Liability

2 8 6 4 1 3

Application of Funds

Net Fixed Assets Investments

4 0 0 1 0 9 2 1 9 3 4 7 8 3

Net Current Assets

1 4 0 8 3 3 8

IV. Performance of Company (Amount in ` Thousands)

Turnover Total Expenditure

1 3 0 6 3 3 9 0 1 1 3 2 9 8 4 9

+ - Profit Before Tax + - Profit After Tax

✓ 1 7 3 3 5 4 1 ✓ 1 1 9 3 8 0 8

Earnings per Share ` Dividend Rate %

6 . 1 4 2 3 0

V. Generic Names of Three Principal Products / Services of Company (as per monetary terms)

Item Code No. (ITC Code)

3 8 0 8 2 0 - 0 9 H E X A C O N A Z O L E

3 8 0 8 1 0 - 2 9 A C E P H A T E

3 8 0 8 2 0 - 9 0 M E T C O N A Z O L E


84

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CONSOLIDATEDFINANCIAL STATEMENTS

85

INDEPENDENT AUDITORS’ REPORTTO THE BOARD OF DIRECTORS OF RALLIS INDIA LIMITED

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of RALLIS INDIA LIMITED (the “Company”) and itssubsidiaries (the Company and its subsidiaries constitute “the Group”), which comprise the Consolidated Balance Sheetas at 31st March, 2013, the Consolidated Statement of Profit and Loss and, the Consolidated Cash Flow Statement for theyear then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

The Company’s Management is responsible for the preparation of these consolidated financial statements that give atrue and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flowsof the Group in accordance with the accounting principles generally accepted in India. This responsibility includes thedesign, implementation and maintenance of internal control relevant to the preparation and presentation of theconsolidated financial statements that give a true and fair view and are free from material misstatement, whether due tofraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conductedour audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. ThoseStandards require that we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in theconsolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessmentof the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation ofthe consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internalcontrol. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Management, as well as evaluating the overall presentation of the consolidatedfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on theconsideration of the reports of the other auditors on the financial statements / financial information of the subsidiariesreferred to below in the Other Matter paragraph, the aforesaid consolidated financial statements give a true and fair viewin conformity with the accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2013;

(b) in the case of the Consolidated Statement of Profit and Loss, of the profit of the Group for the year ended on thatdate; and

(c) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.

Other Matter

We did not audit the financial statements of two subsidiaries, whose financial statements reflect total assets (net) of Rs.493.16 lacs as at 31st March, 2013, total revenues of Rs. Nil lacs and net cash flows amounting to Rs. 25.47 lacs for the yearended on that date, as considered in the consolidated financial statements. These financial statements have been auditedby other auditors whose reports have been furnished to us by the Management and our opinion, in so far as it relates tothe amounts and disclosures included in respect of these subsidiaries, is based solely on the reports of the other auditors.Our opinion is not qualified in respect of this matter.




(Membership No.34382)MUMBAI, 25th April, 2013


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RALLIS


CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2013` lacs

Note No. As at As at31st March, 31st March,

2013 2012

EQUITY AND LIABILITIESShareholders’ funds

Share capital 2 1,944.71 1,944.71Reserves and surplus 3 60,128.79 53,357.09

62,073.50 55,301.80

Minority Interest 469.42 144.84Non-current liabilities

Long-term borrowings 4 1,073.56 8,558.03Deferred tax liabilities (Net) 31 2,864.13 1,308.46Other Long term liabilities 5 595.76 389.46Long-term provisions 6 3,047.25 2,940.76

7,580.70 13,196.71Current liabilities

Short-term borrowings 7 4,326.81 6,498.24Trade payables 25,028.14 24,705.00Other current liabilities 8 15,815.16 9,062.18Short-term provisions 9 3,723.74 3,232.35

48,893.85 43,497.77

Total 119,017.47 112,141.12

ASSETSNon-current assets

Fixed assetsTangible assets 10 a 37,453.29 36,121.69Intangible assets 10 b 1,321.89 250.92Capital work-in-progress 1,572.62 3,492.11Intangible assets under development 1,879.86 2,496.17

Goodwill on consolidation 16,764.15 15,333.81Non-current investments 11 1,869.30 1,973.14Deferred tax assets (net) 31 51.84 -Long-term loans and advances 12 9,177.18 9,093.75Other non-current assets 13 - 20.90

70,090.13 68,782.49Current assets

Current investments 14 103.84 296.14Inventories 15 26,717.94 27,172.19Trade receivables 16 16,477.41 10,350.74Cash and cash equivalents 17 2,583.56 1,120.69Short-term loans and advances 18 2,770.38 4,126.96Other current assets 19 274.21 291.91

48,927.34 43,358.63

Total 119,017.47 112,141.12

Summary of significant accounting policies 1Notes referred to above form an integral part of the Balance Sheet and should be read in conjunction therewith.In terms of our report attachedFor DELOITTE HASKINS & SELLS R. GOPALAKRISHNAN ChairmanChartered Accountants




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87

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2013` lacs

Note No. For the For theyear ended year ended31st March, 31st March,

2013 2012

Revenue from operations (gross) 20 155,297.95 135,369.65Less : Excise Duty 9,479.75 7,882.19

Revenue from Operations (net) (I) 145,818.20 127,487.46

Expenses:Cost of materials consumed 22 77,328.90 66,774.14Purchases of traded Goods 11,551.53 8,732.32Changes in inventories of finished goodswork-in-progress and stock-in-trade 23 (1,092.65) (1,577.48)Employee benefits expense 24 9,439.43 9,245.99Other expenses 25 27,533.83 24,016.41

Total expenses (II) 124,761.04 107,191.38

Earnings before interest, depreciation, tax and amortization (I-II) 21,057.16 20,296.08Finance costs 26 1,848.70 1,459.27Depreciation and amortization expense 10 3,153.31 2,865.93Other income 21 1,173.54 687.21

Profit before exceptional items 17,228.69 16,658.09

Exceptional itemsCessation Cost - 1,719.11

Profit before tax 17,228.69 14,938.98Tax expense:

a. Current tax 3,907.07 3,842.08b. Less: MAT credit 34.96 23.61c. Deferred tax - Charge (net) 1,476.90 1,051.31

Profit for the year before minority interest 11,879.68 10,069.20

Minority Interest (21.54) 151.01


Earnings per equity share: (`) 34(1) Basic 6.12 5.10(2) Diluted 6.12 5.10Summary of significant accounting policies 1Notes referred to above form an integral part of the Statement of Profit and Loss and should be read in





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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2013

` lacs


2013 2012

A CASH FLOW FROM OPERATING ACTIVITIES:Profit before tax 17,228.69 14,938.98

Adjustments for :

Loss on Foreign exchange 0.88

Depreciation and amortization expense 3,153.31 2,865.93

Interest expenses 1,781.93 1,407.26

Interest income (106.16) (86.84)

Surplus on liquidation of subsidiary - (12.99)

Grants for projects (41.52) (31.64)

Dividend Income (87.61) (23.20)

Credit balances written back (5.67) (442.05)

Provision for supplemental payments on retirement 82.80 (67.83)

Provision for gratuity (126.57) 197.63

Provision for compensated absences (1.41) (12.33)

Unrealised foreign exchange translation loss 55.78 59.57

Profit on sale of assets (net) (includes assets w/off ) (689.21) (224.73)

Operating Profit before Working Capital Changes 21,244.36 18,568.64

Adjustments for :

Trade payables and other liabilities 408.01 470.29

Trade receivables and other assets (5,517.55) 349.53

Inventories 454.25 (4,280.31)

Long term loans and advances 79.38 (35.37)

Short term loans and advances 1,363.55 (1,577.46)

CASH GENERATED FROM OPERATIONS 18,032.00 13,495.32Taxes paid (Net of refund and interest on refund received) (3,601.60) (4,069.09)

NET CASH FROM OPERATING ACTIVITIES (A) 14,430.40 9,426.23

B CASH FLOW FROM INVESTING ACTIVITIES:Purchase of fixed assets (4,654.43) (5,700.68)

Proceeds on sale of fixed assets 1,163.60 387.86

Advance received against fixed assets to be disposed off - 650.13

Amount Received on liquidation of subsidiary - 12.99

Purchase of current investments (21,585.70) (12,321.46)

Proceeds from redemption of debentures 296.14 290.40

Purchase of non-current investments in subsidiary (1,084.22) (3,191.83)

Proceeds from sale of current investments 21,585.70 12,321.46

Interest/Dividend received 241.24 157.95

Investments in bank deposits (original maturity of more than 3 months) (net) 44.74 (8.51)

NET CASH USED IN INVESTING ACTIVITIES (B) (3,992.93) (7,401.69)

89

C CASH FLOW FROM FINANCING ACTIVITIES:

Proceeds from long-term borrowings 183.76 258.29

Repayment of long-term borrowings (283.69) (18.56)

Capital subsidy received 66.52 31.63

Proceeds/(Repayment) of short-term borrowings (net) (2,171.43) 3,448.82

Dividends paid on Equity Shares (including dividend distribution tax) (4,954.69) (4,726.51)

Interest paid (1,788.01) (1,383.32)

NET CASH USED IN FINANCING ACTIVITIES (C) (8,947.54) (2,389.65)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A) + (B) + (C) 1,489.93 (365.11)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR


Balances with Scheduled Banks on Current Account and Deposit Account 846.41 1,190.26

850.65 1,215.76

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR


Balances with Scheduled Banks on Current Account and Deposit Account 2,333.11 846.41

2,340.58 850.65

Footnotes:

Cash and Cash Equivalents as above 2,340.58 850.65

Restricted Bank Balances 96.18 78.50

Balances with scheduled banks:

On Bank Deposit as Margin Money against Bank Guarantees 146.80 191.54

CASH AND BANK BALANCES AS PER NOTE 17 2,583.56 1,120.69

Notes referred to above form an integral part of the Consolidated Cash Flow and should be read in conjunction therewith.

` lacs


2013 2012





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Note 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE YEAR ENDED 31ST MARCH, 2013

1. SIGNIFICANT ACCOUNTING POLICIES: -

(a) Principles of Consolidation

The Consolidated Financial Statements relate to Rallis India Limited (“the Company”) and its subsidiaries. TheCompany and its subsidiaries constitute the “Group”. The consolidated financial statements have been preparedon the following basis:

The financial statements of the Company and its subsidiaries have been combined on a line-by-line basis byadding together the book values of like items of assets, liabilities, income and expenses, after fully eliminatingintra-group balances and intra-group transactions resulting in unrealised profits or losses as per AccountingStandard (AS) 21 “Consolidated Financial Statements” referred to in section 211 (3C) of the Companies Act 1956.

The foreign subsidiary’s revenue items are consolidated at the average foreign currency exchange rate prevailingduring the year. All assets and liabilities are converted at the rates prevailing at the end of the year. Exchangegains / (losses) arising on conversion are recognised under Foreign Currency Translation Reserve.

The excess of the cost of the Company of its investment in subsidiaries over the Company’s portion of equity as atthe date on which the investment in subsidiary companies are made is recognised in the financial statement as“Goodwill on Consolidation.”

Minority interest in net assets of subsidiaries consists of:

a) The amount of equity attributable to minority at the date on which investment in subsidiary is made.

b) The minority share of movements in equity since the date parent-subsidiary relationship comes into existence.Minority interest in share of net result for the year is identified and adjusted against the profit after tax.Excess of loss, if any, attributable to minority over and above the minority interest in equity of the subsidiaryis absorbed by the Group.

Details of the subsidiaries whose assets, liabilities, income and expenses are included in the consolidation and theCompany’s holdings therein are as under:

Entity Incorporated in Proportion of Groups interest (%) Date of acquisition -of control

Held Directly:

Rallis Chemistry Exports Ltd India 100% 7th July , 2009*

Metahelix Life Sciences Ltd # India 77.02% 30th December, 2010

Zero Waste Agro OrganicsPrivate Ltd India 22.81% 18th October, 2012

Rallis Australasia Pty Ltd $ Australia 100% 4th May, 2006*

Held through Subsidiary:

Dhaanya Seeds Ltd @ India 77.02% 30th December, 2010

* Date of incorporation

@ (wholly owned subsidiary of Metahelix Life Sciences Ltd)

# Pursuant to Share Purchase Agreement dated 9th December, 2010 the Company has acquired additional stakeof equity shares in Metahelix Life Sciences Limited (Metahelix) during the year ended 31st March, 2013, consequentlythe shareholding of the Company in Metahelix has increased from 75.64% to 77.02% as at 31st March, 2013.

During the year ended 31st March 2013, the Company has acquired / subscribed to shares comprising 22.81% ofthe equity shares of Zero Waste Agro Organics Private Limited (ZWAOPL). Rallis India Limited has certain rightsunder the Shareholder Agreement which requires ZWAOPL to be treated as a subsidiary of the Company andhence it is consolidated.

$ Liquidated on 25th January, 2012

91

(b) Basis of Accounting

The financial statements are prepared as per historical cost convention and in accordance with the generallyaccepted accounting principles in India, the provisions of the Companies Act, 1956, and the applicable AccountingStandards referred to in section 211(3C) of the Companies Act, 1956. All income and expenditure having materialbearing on the financial statements are recognised on accrual basis.

(c) Use of Estimates

The presentation of the financial statements in conformity with the generally accepted accounting principlesrequires the management to make estimates and assumptions that affect the reported amount of assets andliabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions arebased on management’s evaluation of relevant facts and circumstances as on the date of financial statements.The actual outcome may diverge from these estimates.

(d) Fixed Assets and Depreciation / Amortisation

(i) Tangible fixed assets and depreciation

Tangible fixed assets acquired by the Group are reported at acquisition cost, with deductions for accumulateddepreciation and impairment losses, if any.

The acquisition cost includes the purchase price (excluding refundable taxes) and expenses directly attributableto bring the asset to the location and condition for its intended use. Examples of directly attributable expensesincluded in the acquisition cost are delivery and handling costs, installation, legal services and consultancyservices.

Where the construction or development of any such asset requiring a substantial period of time to set up forits intended use, is funded by borrowings, the corresponding borrowing costs are capitalised up to the datewhen the asset is ready for its intended use.

Depreciation is provided on a straight line basis at rates and in the manner specified in Schedule XIV to theCompanies Act, 1956, unless the use of a higher rate or an accelerated charge is justified through technicalestimates. Fixed assets costing less than ` 5,000 are fully depreciated in the year of purchase. Extra shiftdepreciation is applied to applicable items of plant and machinery for days additional shifts are worked.Freehold land is not depreciated since it is deemed to have an indefinite economic life. The premium paid foracquiring leasehold land is amortised over the period of lease on a straight line basis.

Depreciation by some subsidiaries is provided on a straight line basis at rates stated below :

Type of Asset Estimated Useful Life

Buildings 10 to 20 Years

Plant and Machinery 5 Years

Seed Processing Machine 10 Years

Electrical Equipments & Fittings 5 Years

Furniture and Fixtures 4 Years

Office Equipments 5 Years

Vehicles 4 to 5 Years

Computer Hardware 3 to 4 Years

Computer Software 1 to 4 Years

Green House 5 Years

(ii) Intangible assets and amortisation

Intangible assets other than goodwill are valued at cost less amortisation. These generally comprise of costsincurred to acquire computer software licences and implement the software for internal use (including


92

RALLIS


software coding, installation, testing and certain data conversion) as well as costs paid to acquire studies forobtaining approvals from registration authorities of products having proven technical feasibility.

Research costs are charged to earnings as they arise.

Costs incurred for applying research results or other knowledge to develop new products, are capitalised tothe extent that these products or registrations are expected to generate future financial benefits. Otherdevelopment costs are expensed as and when they arise.

Goodwill comprises the portion of purchase price for an acquisition that exceeds the market value of theidentifiable assets, with deductions for liabilities, calculated on the date of acquisition, on the Company’sshare in the acquired company’s assets.

Intangible assets are reported at acquisition value with deductions for accumulated amortisation and anyimpairment losses.

Amortisation is provided on a straight line basis over the asset’s anticipated useful life. The useful life isdetermined based on the period of the underlying contract and the period of time over which the intangibleasset is expected to be used and generally does not exceed 10 years.

An impairment test of intangible assets is conducted annually or more often if there is an indication of adecrease in value. The impairment loss, if any, is reported in the Statement of Profit and Loss.

(e) Impairment of assets

The carrying values of assets of the Group’s cash-generating units are reviewed for impairment annually or moreoften if there is an indication of decline in value. If any indication of such impairment exists, the recoverableamounts of those assets are estimated and impairment loss is recognised, if the carrying amount of those assetsexceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their valuein use. Value in use is arrived at by discounting the estimated future cash flows to their present value based on anappropriate discount factor.

(f) Investments

Long term investments are valued at cost, less provision for other than temporary diminution in value, if any.Current investments are valued at the lower of cost and fair value.

(g) Inventory

Inventories are valued at the lower of cost and net realisable value.

In case of raw materials, packing materials, stores and spare parts and traded finished goods, costs are determinedin accordance with continuous moving weighted average principle. Costs include purchase price, non-refundabletaxes and delivery and handling costs.

Cost of finished goods and work-in-progress are determined using the absorption costing principles. Cost includescost of materials consumed, labour and a systematic allocation of variable and fixed production overheads. Exciseduties at the applicable rates are also included in the cost of finished goods.

Net realisable value is estimated at the expected selling price less estimated completion and selling costs.

(h) Revenue Recognition

Sales include products and services, net of trade discounts and exclude sales tax, state value added tax andservice tax.

With regard to sale of products, income is reported when all obligations connected with the transfer of risks andrewards to the buyer have been fulfilled. This usually occurs upon dispatch, after the price has been determinedand collection of the receivable is reasonably certain.

Income recognition for services takes place as and when the services are performed.

93

Amounts received from customers specifically towards setting up / expansion of manufacturing facilities, linkedto a contractual arrangement for supply of specified quantities of product manufactured from the said facilities atpre-determined prices, are treated as current liabilities and recognized as revenue in the Statement of Profit andLoss over the contracted period of supply in proportion to the quantities dispatched.

Government grants and subsidies are recognised when there is reasonable assurance that the Group will complywith the conditions attached to them and the grants / subsidy will be received. Government grants whoseprimary condition is that the Company should purchase, construct or otherwise acquire capital assets are presentedby deducting them from the carrying value of the assets. The grant is recognised as income over the life of adepreciable asset by way of a reduced depreciation charge .

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty inreceiving the same

Government grants in the nature of promoters’ contribution like investment subsidy, where no repayment isordinarily expected in respect thereof, are treated as capital reserve. Government grants in the form of non-monetary assets, given at a concessional rate, are recorded on the basis of their acquisition cost. In case the non-monetary asset is given free of cost, the grant is recorded at a nominal value.

Other government grants and subsidies are recognised as income over the periods necessary to match them withthe costs for which they are intended to compensate, on a systematic basis.

(i) Financial Income and Borrowing Cost

Financial income and borrowing cost include interest income on bank deposits and interest expense on loans.

Interest from interest-bearing assets is recognised on an accrual basis over the life of the asset based on theconstant effective yield. The effective interest is determined on the basis of the terms of the cash flows under thecontract including related fees, premiums, discounts or debt issuance costs, if any.

Borrowing costs are recognised in the period to which they relate, regardless of how the funds have been utilised,except where it relates to financing of construction or development of assets requiring a substantial period oftime to prepare for their intended future use when interest is capitalised up to the date when the asset is readyfor its intended use. The amount of interest capitalised (gross of tax) for the period is determined by applying theinterest rate applicable to appropriate borrowings outstanding during the period to the average amount ofaccumulated expenditure for the assets during the period.

(j) Foreign Currency Transactions

Transactions in foreign currencies are translated to the reporting currency based on the exchange rate on thedate of the transaction. Exchange differences arising on settlement thereof during the year are recognised asincome or expenses in the Statement of Profit and Loss.

Cash and bank balances, receivables and liabilities (monetary items) in foreign currencies as at the year end arevalued at year end rates, and unrealised translation differences are included in the Statement of Profit and Loss.

Investments in foreign currency (non monetary items) are reported using the exchange rate at the date of thetransaction.

The Group’s forward exchange contracts are not held for trading or speculation. The premium/discount arising onentering into such contract is amortised over the life of such contracts and exchange differences arising on suchcontracts are recognised in the Statement of Profit and Loss.

Hedge Accounting

The Group uses currency option contracts to hedge its risks associated with foreign currency fluctuations relatingto highly probable forecasted transactions. The Group designates such currency option contracts in a cash flowhedging relationship by applying the hedge accounting principles set out in Accounting Standard 30 FinancialInstruments: Recognition and Measurement.


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These contracts are stated at fair value at each reporting date. Changes in the intrinsic value of these contractsthat are designated and effective as hedges of future cash flows are recognised directly in Hedging ReserveAccount under Reserves and Surplus, net of applicable deferred income taxes. The ineffective portion and thetime value is recognised immediately in the Statement of Profit and Loss.

Amounts accumulated in Hedging Reserve Account are recycled to the Statement of Profit and Loss in the sameperiods during which the forecasted transaction affects the Statement of Profit and Loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or nolonger qualifies for hedge accounting. For forecasted transactions, any cumulative gain or loss on the hedginginstrument recognised in Hedging Reserve Account is retained there until the forecasted transaction occurs.

If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss recognised in HedgingReserve Account is immediately transferred to the Statement of Profit and Loss for the period.

(k) Employee Benefits

Short term employee benefits are recognised as an expense at the undiscounted amount expected to be paidover the period of services rendered by the employees to the Group.

The Group has both defined-contribution and defined-benefit plans, of which some have assets in special fundsor securities. The plans are financed by the Group and in the case of some defined contribution plans by theGroup along with its employees.

The contribution as specified under the law are paid to the Provident Fund set up as irrevocable trust by theGroup or to the Regional Provident Fund Commissioner. The Group is generally liable for annual contribution andany shortfall in the fund assets based on the government specified minimum rates of return. Such contributionsand shortfall, if any, are recognised in the Statement of Profit and Loss as an expense in the year incurred.

Expenses for gratuity and supplemental payment plans are calculated as at the balance sheet date by independentactuaries in a manner that distributes expenses over the employee’s working life. These commitments are valuedat the present value of the expected future payments, with consideration for calculated future salary increases,using a discount rate corresponding to the interest rate estimated by the actuary having regard to the interestrate on government bonds with a remaining term that is almost equivalent to the average balance workingperiod of employees.

Compensated absences which accrue to employees and which can be carried to future periods but are expectedto be encashed or availed in twelve months immediately following the year end are reported as expenses duringthe year in which the employees perform the services that the benefit covers and the liabilities are reported atthe undiscounted amount of the benefits after deducting amounts already paid. Where there are restrictions onavailment of encashment of such accrued benefit or where the availment or encashment is otherwise not expectedto wholly occur in the next twelve months, the liability on account of the benefit is actuarially determined usingthe projected unit credit method.

(l) Taxes on Income

The Group’s income taxes comprises aggregate of tax computed on the individual Company’s taxable profits asper local laws, adjustment attributable to earlier periods and changes in deferred taxes. Valuation of all taxliabilities / receivables is conducted at nominal amounts and in accordance with enacted tax regulations and taxrates or in the case of deferred taxes, those that have been enacted or substantively enacted.

Deferred tax is calculated to correspond to the tax effect arising when final tax is determined. Deferred taxcorresponds to the net effect of tax on all timing differences which occur as a result of items being allowed forincome tax purposes during a period different from when they were recognised in the financial statements.

Deferred tax assets are recognised with regard to all deductible timing differences to the extent that it is probablethat taxable profit will be available against which deductible timing differences can be utilised. When the Groupcarries forward unused tax losses and unabsorbed depreciation, deferred tax assets are recognised only to theextent there is virtual certainty backed by convincing evidence that sufficient future taxable income will beavailable against which deferred tax assets can be realised.

95

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent thatit is no longer probable that sufficient taxable profit will be available to allow all or a part of the aggregatedeferred tax asset to be utilised.

(m) Lease Accounting

(i) Operating Leases

Lease of an asset whereby the lessor essentially remains the owner of the asset is classified as operatinglease. The payments made by the Group as lessee in accordance with operational leasing contracts or rentalagreements are expensed proportionally during the lease or rental period respectively. Any compensation,according to agreement, that the lessee is obliged to pay to the lessor if the leasing contract is terminatedprematurely is expensed during the period in which the contract is terminated.

(ii) Finance Leases

Depreciation on the assets taken on lease is charged at the rate applicable to similar type of fixed assets asper the Group’s accounting policy on depreciation as stated above. If the leased assets are returnable to thelessor on the expiry of the lease period, depreciation is charged in accordance with the Group’s depreciationpolicy as stated above or on a straight line basis over the lease period, which ever is shorter.

Lease payments made are apportioned between the finance charges and reduction of the outstandingliability in respect of assets taken on lease.

(n) Segment Reporting

The accounting policies adopted for segment reporting are in line with the accounting policies of the Group.Segment Revenue, Segment Expenses, Segment Assets and Segment Liabilities have been identified to segmentson the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilitieswhich relate to the Group as a whole and are not allocable to segments on reasonable basis, have been includedunder “Unallocated Revenue / Expenses / Assets / Liabilities”.

(o) Provisions and Contingencies

A provision is recognised when the Group has a present obligation as a result of a past event and it is probablethat an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can bemade. Provisions (excluding retirement benefits) are not discounted to their present value and are determinedbased on best estimate required to settle the obligation at the balance sheet date. These are reviewed at eachbalance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognisedbut are disclosed in the notes to the financial statements unless the possibility of an outflow of resources embodyingeconomic benefit is remote. A contingent asset is neither recognised nor disclosed.

(p) Cash Flow Statements

Cash-flow statement is prepared in accordance with the “Indirect Method” as explained in the Accounting Standard(AS) 3 - Cash Flow Statements as prescribed under section 211(3C) of the Companies Act 1956.

(q) Cash and Cash Equivalents

Cash and bank balances and current investments that have insignificant risk of change in value, which havedurations up to three months, are included in the Group’s cash and cash equivalents in the Cash Flow Statement.

(r) Earnings per Share

Basic Earnings per Share is calculated by dividing the net profit after tax for the year attributable to equityshareholders of the Group by the weighted average number of equity shares outstanding during the year.

(s) Goodwill on Consolidation

Goodwill on Consolidation represents the difference between the Group’s share in the net worth of the investeecompany at the time of acquisition and the cost of investment made. The said Goodwill is not amortised; howeverit is tested for impairment at each Balance Sheet date and impairment loss, if any, is provided for.


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2 SHARE CAPITAL:



Authorised

Equity Shares of `1 each 500,000,000 5,000.00 500,000,000 5,000.00

Cumulative Redeemable PreferenceShares of `10 each 150,000,000 15,000.00 150,000,000 15,000.00

Issued, Subscribed and Fully Paid up

Equity Shares of `1 each fully paid up 194,468,890 1,944.69 194,468,890 1,944.69

Forfeited Shares

Equity Shares of `1 each 2,000 0.02 2,000 0.02

Total 194,470,890 1,944.71 194,470,890 1,944.71

a. Reconciliation of shares outstanding at the beginning and at the end of the reporting period:



At the beginning of the year 194,468,890 1,944.69 19,446,889 1,944.69

Sub-division (refer note below) - - 175,022,001 -

Outstanding at the end of the period 194,468,890 1,944.69 194,468,890 1,944.69

Pursuant to the Shareholders’ approval at the Company’s Annual General Meeting held on 30th June, 2011, theCompany’s Equity Shares of face value of ` 10 each were sub-divided into ten Equity Shares of face value of` 1 each with effect from 18th July, 2011.

b. The Equity Shares of the Company have voting rights and are subject to the preferential rights as prescribedunder law or those of the preference shareholders, if any. The Equity Shares are also subject to restrictions asprescribed under the Companies Act, 1956.

c. Shares held by Holding /Ultimate Holding Company and /or its subsidiaries /associates:

Out of total equity shares issued by the Company, shares held by its holding company, ultimate holding companyand its subsidiaries/associates are as below:


Number ` lacs Number ` lacsof Shares of Shares

Tata Chemicals Limited (Holding Company) 97,341,610 973.42 97,341,610 973.42

d. Details of shareholders holding more than 5% shares in the Company:


No. of Shares % Holding No. of Shares % Holding

Tata Chemicals Limited 97,341,610 50.06% 97,341,610 50.06%

Rakesh Jhunjhunwala 19,507,820 10.03% 12,416,820 6.38%

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e. Aggregate number of bonus shares issued, shares issued for consideration other than cash and sharesbought back during the period of five years immediately preceeding the reporting date:

2012-13 2011-12 2010-11 2009-10 2008-09

Equity Shares :

Bonus shares issued * - - 6,482,296 - -

Preference Shares :

7.50% Cumulative Reedeemable - - - 88,000,000 -Preference Shares of ` 10 each Redeemed

* 64,82,296 shares of ` 10 each were issued as Bonus Shares by way of capitalisation of ` 648.23 lacs out of CapitalRedemption Reserve.

f. As per records of the Company, no calls remain unpaid by the directors and officers of the Company as on 31stMarch, 2013.

3 RESERVES AND SURPLUS:

` lacs

As at Additions Deductions As at As at Additions Deductions As at1st April, 31st March, 1st April, 31st March,

2012 2013 2011 2012

Capital Reserve 1,243.10 - - 1,243.10 1,243.10 - - 1,243.10

Capital Redemption Reserve 8,151.77 - - 8,151.77 8,151.77 - - 8,151.77

Securities Premium Account 8,793.88 - - 8,793.88 8,793.88 - - 8,793.88

Debenture Redemption Reserve 2,500.00 1,250.00 - 3,750.00 1,250.00 1,250.00 - 2,500.00

Other Reserves :

Capital Subsidy 63.58 25.00 - 88.58 63.58 - - 63.58

General Reserve 8,528.14 1,193.81 - 9,721.95 7,514.24 1,013.90 - 8,528.14

Hedging Reserve Account (Refer Note No. 35 ) (63.40) - (63.40) - 73.66 - 137.06 (63.40)

Foreign Currency translation reserve - - (0.88) 0.88 - -

29,217.07 2,468.81 (63.40) 31,749.28 27,089.35 2,264.78 137.06 29,217.07

Surplus in the Statement of Profit and Loss

Balance as per last financial statements 24,140.02 - - 24,140.02 21,458.10 - - 21,458.10

Net Profit for the current year - 11,901.22 - 11,901.22 - 9,918.19 - 9,918.19

Debenture Redemption Reserve - - 1,250.00 (1,250.00) - - 1,250.00 (1,250.00)

Interim Dividend on Equity Shares - - 1,944.69 (1,944.69) - - 1,944.69 (1,944.69)

Distribution Tax on Interim Dividend - - 315.48 (315.48) - - 315.48 (315.48)

Proposed Equity Dividend - - 2,528.10 (2,528.10) - - 2,333.63 (2,333.63)

Distribution Tax on Proposed Equity Dividend - - 429.65 (429.65) - - 378.57 (378.57)

Transfer to General Reserves - - 1,193.81 (1,193.81) - - 1,013.90 (1,013.90)

Net Surplus in the Statement of Profit and Loss 24,140.02 11,901.22 7,661.73 28,379.51 21,458.10 9,918.19 7,236.27 24,140.02

Total 53,357.09 14,370.03 7,598.33 60,128.79 48,547.45 12,182.97 7,373.33 53,357.09


98

RALLIS


4 LONG-TERM BORROWINGS:` lacs


2013 2012

Secured

a. Debentures (Refer note a,b and c below) - 7,500.00

b. Term Loans

from banks (Refer note g and h) 66.93 197.80

from others (Refer note d and e) 89.50 63.80

156.43 7,761.60

Unsecured

Deferred payment liabilities

i. Sales Tax Deferral Scheme (Refer note f ) 766.87 627.68

ii. Council of Scientific & Industrial Research Loan (Refer note f ) 150.26 168.75

917.13 796.43

Total 1,073.56 8,558.03

a. 750 (Previous Year: 750) 9.05% Secured Redeemable Non-Convertible Debentures (2010-11 Series 1) having a facevalue of ` 10 Lacs each redeemable at par on 29th October, 2013.

b. These Non Convertible Debentures are secured by a first pari-passu mortgage over factory building and certainplant and machinery of Ankleshwar and Lote units.

c. The Company can repurchase some or all of the debentures at any time prior to date of redemption. The Companyhas the right to re-issue debentures bought back subject to provisions of the Companies Act, 1956.

d. Vehicle loan secured by hypothecation of vehicle purchased using the loan. The Loan is repayable in equatedmonthly installments alongwith interest from August-2008 to August-2013 and carries interest @ 12.57% p.a.

e. Term loan from Biotechnology Industry Partnership Project is secured by hypothecation of all equipment, apparatusmachineries, machineries spares, tools and other accessories, goods and/or the other movable property of theCompany, present and future to a value equivalent to the amount of loan and interest thereon and the royaltypayable on grant-in-aid till the full and final settlement of all dues. Term loan is repayable alongwith interest in 10equal half yearly installments and shall commence from one year from the date of completion of the project or28th March, 2013 and 20th August, 2013 (being the cut off date of project completion). Loan carries interest rateof @ 2%pa

f. Details of terms of repayment: (` in lacs)

Particulars Repayment Schedule As at As at31st March, 31st March,

2013 2012

Sales Tax Deferral Scheme - Akola Varied Annual Installments from 218.97 331.842013-14 to 2015-16

Sales Tax Deferral Scheme - Lote* Varied Annual Installments from 616.24 497.462018-19 to 2026-27

Council of Scientific & Varied Annual Installments from 169.09 190.97Industrial Research loan 2013-14 to 2023-24

* Loan disclosed above is considered as per SICOM scheme, although the matter is in dispute with the Sales TaxTribunal.

99

5 OTHER LONG TERM LIABILITIES:` lacs


2013 2012

Advances from customers 588.21 383.00Interest accrued but not due on borrowings 7.55 6.46

Total 595.76 389.46

6 LONG-TERM PROVISIONS:` lacs


2013 2012

Provision for employee benefitsGratuity 16.77 21.02Compensated Absences 430.39 397.02Supplemental Payments on Retirement 1,426.60 1,349.23

OthersFringe Benefit Tax 12.96 12.96Provision for Income Tax (net of advance tax) 1,160.53 1,160.53

Total 3,047.25 2,940.76

7 SHORT-TERM BORROWINGS:` lacs


2013 2012Secured

Loans repayable on demand from banks* 2,826.81 6,498.24

UnsecuredLoans repayable on demand from banks 1,500.00 -

Total 4,326.81 6,498.24

* These loans have been secured by a first charge by way of hypothecation of stocks and receivables.The hypothecation also extends to guarantees issued by the Company’s Bankers in the ordinary course of business.

g. Term loan from Kotak Mahindra Bank – The loan is secured by first pari passu charge on movable assets fundedby the bank and hypothecation of plant and machinery of the cob drying unit at Hyderabad. The loan is furthersecured by corporate guarantee and equitable mortgage of the land and building of Metahelix Life SciencesLimited. The balance outstanding as at March 31, 2013 is ` 57.77 Lakhs repayable in 25 equated monthly installmentsof ` 4.44 Lakhs starting April 2013 at an interest of 11.5% or as mutually agreed.

h. Term loan from Axis Bank - the loan is secured by first charge on entire movable fixed assets funded by the bankand second charge on the assets funded by Kotak Mahindra bank. The loan is further secured by corporateguarantee and equitable mortgage of the land and building of Metahelix Life Sciences Limited. The balanceoutstanding as at March 31, 2013 is ` 9.15 Lakhs repayable in 15 equated monthly installments of ` 6.67 Lakhsstarting April 2013 (with respect to amount oustanding) at an interest of 10.75% or as mutually agreed.


100

RALLIS


8 OTHER CURRENT LIABILITIES:` lacs


2013 2012Other Liabilities

i. Current maturity of long term debt

Secured

Term loans

from banks (Refer Notes g and h in Note 4) 133.37 126.43

from others (Refer Notes d and e in Note 4) 17.63 3.36

Debentures (Refer Notes a,b & c in Note 4) 7,500.00 -

Unsecured

Sales Tax Deferral Scheme (Refer Note f in Note 4) 68.34 201.62

Council of Scientific & Industrial Reseach Loan (Refer Note f in Note 4) 18.83 22.22

ii. Interest accrued but not due on borrowings 36.25 43.42

iii. Unpaid dividends 96.18 78.50

iv. Other Payables

Provident Fund and other employee deductions 130.87 125.74

Customer Advances and Deposits 6,836.93 6,998.33

Creditors for capital purchases 551.08 1,045.06

Central Excise, Customs duty, VAT and Service Tax payable 284.91 310.17

Provision for contingency 50.00 50.00

Tax deducted at source 90.77 57.33

Total 15,815.16 9,062.18

9 SHORT-TERM PROVISIONS:

` lacs


2013 2012

a. Provision for employee benefits

Gratuity 133.39 248.74

Compensated Absences 67.59 102.37

Supplemental Payments on retirement 150.86 145.43

b. Others

Provision for Income Tax (net of advance tax) 414.15 23.61

Proposed Equity Dividend 2,528.10 2,333.63

Distribution Tax on Proposed Equity Dividend 429.65 378.57

Total 3,723.74 3,232.35

101

10 FIXED ASSETS:

` lacsGross Block (At Cost) Accumulated Depreciation/Amortisation Net Block

As at Acquisition Additions Disposals/ As at As at Acquisition Depreciation On disposals/ As at As at As at

1st April, during Adjustments 31st March, 1st April, during charge for Adjustements 31st March, 31st March, 31st March,

2012 year cation 2013 2012 the year the year 2013 2013 2012

a Tangible Assets

Freehold Land 457.24 - - - 457.24 - - - - - 457.24 457.24

Leasehold Land 4,609.41 - 36.57 - 4,645.98 203.11 - 46.26 - 249.37 4,396.61 4,406.30(Refer footnote 3)

Buildings 15,295.51 - 576.82 536.65 15,335.68 2,570.14 - 441.57 251.29 2,760.42 12,575.26 12,725.38(Refer footnotes 1 & 2)

Plant and Equipment 31,044.30 85.98 4,344.65 2,672.39 32,802.54 13,472.69 6.52 2,297.14 1,981.72 13,794.63 19,007.91 17,571.61

Furniture and Fixtures 596.53 1.05 193.31 9.47 781.42 347.38 - 37.37 8.78 375.97 405.45 249.15

Vehicles 1,068.59 - 435.50 633.09 523.33 - 93.08 290.04 326.37 306.72 545.26

Office Equipment 300.47 169.91 6.21 464.17 133.72 - 30.50 4.15 160.07 304.10 166.75

Total 53,372.05 87.03 5,321.26 3,660.22 55,120.12 17,250.37 6.52 2,945.92 2,535.98 17,666.83 37,453.29 36,121.69

b Intangible Assets

Goodwill 163.63 - - - 163.63 163.63 - - - 163.63 - -

Computer software 1,003.25 - 60.26 - 1,063.51 950.83 - 50.95 - 1,001.78 61.73 52.42

Product Registrations 493.25 - 727.40 - 1,220.65 493.25 - 16.93 - 510.18 710.47 -

Technical knowhow 247.72 - 490.70 - 738.42 49.22 - 139.51 - 188.73 549.69 198.50

Total 1,907.85 1,278.36 - 3,186.21 1,656.93 207.39 - 1,864.32 1,321.89 250.92

Total Fixed Assets 55,279.90 87.03 6,599.62 3,660.23 58,306.33 18,907.30 6.52 3,153.31 2,535.98 19,531.15 38,775.18

Previous Year 39,904.15 - 16,922.85 1,547.10 55,279.90 17,425.34 - 2,865.93 1,383.97 18,907.30 36,372.61

Footnotes:

1 Cost of buildings includes cost of 45 shares (Previous Year 50 shares) of `50 each fully paid and cost of 5 shares (Previous Year 5 shares) of ` 100 each fully paid in respect of ownership flats in 6(Previous Year 7) Co-operative Societies.

2 Buildings include an asset having gross block of ` 156.96 lacs (Previous Year ` 169.29 lacs) and net block of ` 105.42 lacs (Previous Year ` 116.06 lacs) where the conveyance in favour of theCompany is not completed.

3 Leasehold land include ` 1,708 lacs, for which the Company has made representation with Government Agency regarding fulfilment of pre-conditions of lease upon expiry of timeline.

4 Fixed assets includes ` 425.42 lacs (Previous Year ` 434.98 lacs) representing the book value of assets held for disposal. The Management expects to recover amounts higher than the carryingvalue of these assets.


102

RALLIS


11 NON-CURRENT INVESTMENTS:` lacs

Nominal Numbers As at As atvalue (in `) 31st March, 31st March,

2012 2011A Trade Investments (Valued at cost less

provision for dimunition)Unquoted equity instruments - Fully paid up:Aich Aar Chemicals Pvt. Ltd. 10 124,002 9.31 9.31Biotech Consortium India Ltd. 10 50,000 5.00 5.00Indian Potash Ltd. 10 54,000 0.90 0.90Bharuch Enviro Infrastructure Ltd. 10 36,750 3.68 3.68Bharuch Eco-Acqua Infrastructure Ltd. 10 300,364 30.03 30.03Sipcot Industries Common Utilities Ltd. 100 113 Nil NilPatancheru Enviro-Tech Ltd. 10 10,822 1.08 1.08Advinus Therapeutics Ltd. 10 18,286,000 1,828.60 1,828.60

1,878.60 1,878.60Less: Provision for diminution in value 9.30 9.30

A 1,869.30 1,869.30B Other Investments (Valued at cost less

provision for diminution)a. Investment in equity instruments -

Fully paid up (Quoted)Spartek Ceramics India Ltd. 10 7,226 Nil NilNagarjuna Finance Ltd. 10 400 Nil NilPharmaceuticals Products of India Limited 10 10,000 Nil NilBallasore Alloys Ltd. (Previously known as Ispat Alloys Ltd.) 10 504 Nil NilJ.K.Cement Ltd. 10 44 Nil NilUniscans & Sonics Ltd. 10 96 Nil Nil

B - -b. Investment in equity instruments -

Fully paid up (Unquoted)Amba Trading Company Limited 10 130,000 53.32 53.32Associated Inds. (Assam) Ltd. 10 30,000 Nil NilCaps Rallis (Private) Ltd. (Nominal value of Zim. $ 2 each) 2,100,000 146.30 146.30

199.62 199.62Less: Provision for diminution in value 199.62 199.62

C - -

D=B+C - -c. Investments in Debentures or Bonds

i. Unquoted-Fully Paid4.25% Advinus Therapeutics Ltd. -Non Convertible Debentures (Refer Note No. 40) 1,000 10,384 - 103.84

ii. Quoted-Fully Paid E - 103.84

14% Spartek Ceramics India Limited-Debentures -Redeemable Partly Convertible (` 1) 60 560 Nil Nil

F - -

G=E+F - 103.84

TOTAL H=A+D+G 1,869.30 1,973.14Aggregate Book Value of Investments:Unquoted - At cost less Provision for diminution in value 1,869.30 1,973.14Quoted - At cost less Provision for diminution in value - -

1,869.30 1,973.14Footnote:Market value of quoted investments ` 0.59 lacs (Previous Year ` 0.57 lacs).

103

12 LONG-TERM LOANS AND ADVANCES:(Unsecured, considered good unless otherwise stated)

` lacsAs at As at

31st March, 31st March,2013 2012

a. Capital Advances 229.75 213.90b. Security Deposits 837.37 812.86c. Other Loans and Advances 363.41 467.30d. Advance Income Tax (net of provision) 7,688.08 7,576.08e. MAT Credit Entitlement 58.57 23.61

Total 9,177.18 9,093.75

13 OTHER NON-CURRENT ASSETS: ` lacsAs at As at


Interest accrued on long term investments - 20.90Total - 20.90

14 CURRENT INVESTMENTS:(Refer Note No. 40) ` lacs

Nominal Numbers As at As atvalue (in `) 31st March, 31st March,

2013 2012Investments in Debentures (Unquoted Fully Paid)

Current portion of 4.25% AdvinusTherapeutics Ltd. - Non Convertible Debentures 1,000 10,384 103.84 296.14

Total 103.84 296.14

15 INVENTORIES:(Valued at the lower of cost and net realisable value) ` lacs


2013 2012a. Raw Materials and components (Including goods-in transit

of ` 965.96 lacs ; Previous year ` 3,209.95 lacs) 7,635.98 9,493.96b. Work-in-progress 732.96 953.84c. Finished goods (excluding finished goods traded in) 15,101.91 13,371.59d. Stock in trade (in respect of goods acquired for trading) 1,899.98 2,316.77e. Stores and spares 109.12 74.46f. Packing Material 1,237.99 961.57

Total 26,717.94 27,172.19

16 TRADE RECEIVABLES: ` lacsAs at As at


Trade receivables outstanding for a period less than six monthsSecured, considered good 772.23 309.58Unsecured, considered good 15,436.60 9,853.41

16,208.83 10,162.99Trade receivables outstanding for a period exceeding six monthsSecured, considered good 4.55 11.00Unsecured, considered good 264.03 176.75Doubtful 816.12 997.57Less: Provision for doubtful debts (816.12) (997.57)

268.58 187.75

Total 16,477.41 10,350.74


104

RALLIS


17 CASH AND CASH EQUIVALENTS:(including other bank balances)

` lacsAs at As at


Cash and Cash equivalentsa. Balances with banks in current accounts 1,554.92 836.57b. Cash on hand 7.47 4.24c. Deposits with less than 3 months maturity 778.19 9.84

2,340.58 850.65Other Bank Balances

a. Balances held for unpaid dividends 96.18 78.50b. Bank deposits as margin money against Bank Guarantees 146.80 191.54

242.98 270.04

Total 2,583.56 1,120.69

18 SHORT-TERM LOANS AND ADVANCES:(Unsecured, considered good unless otherwise stated ` lacs


2013 2012Advances Recoverable in Cash or in Kind 1,253.69 2,657.70Advances/Deposits considered doubtful of recoveryDoubtful 4,523.28 4,523.28

Less: Provision for doubtful loans and advances (4,523.28) (4,523.28)Balances with Government Authorities 1,509.72 1,469.26Gratuity 6.97 -

Total 2,770.38 4,126.96

19 OTHER CURRENT ASSETS:` lacs


2013 2012Interest on current maturity of Debentures 26.60 54.51Interest on current maturity of Fixed deposit 6.43 5.09Grants 9.37 -Export benefits receivable 231.81 232.31

Total 274.21 291.91

20 REVENUE FROM OPERATIONS:` lacs


2013 2012Sale of products

Own Manufactured Goods 135,770.57 122,730.51Traded Goods 17,718.05 10,062.98

Sale of services 81.76 27.78Other operating revenues

Scrap and Sundry Sales 995.70 1,008.86Export Incentives 415.87 742.27Discounts Earned 119.07 120.89Royalty Income 149.74 202.69Grants for projects 41.52 31.64Others 5.67 442.05

155,297.95 135,369.65Less: Excise duty 9,479.75 7,882.19

Total 145,818.20 127,487.46

105

21 OTHER INCOME:` lacs


2013 2012

Interest Income on term and fixed deposits 20.20 20.91Interest on loans and advances 33.33 19.04Income from Investments

On current investments 40.21 38.38On long term investments 12.42 8.51

Dividend incomeOn current investments 85.71 21.48On long term investments 1.90 1.72

Surplus on Liquidation of Subsidiary - 12.99Profit on sale of Fixed Assets (net) 689.21 224.73Sundry Income 290.56 339.45

Total 1,173.54 687.21

22 COST OF MATERIALS CONSUMED:` lacs


2013 2012Raw Materials Consumed

Opening Stock 9,493.96 6,809.14Add : Purchases 69,977.88 65,017.20Less : Closing Stock 7,635.98 9,493.96

71,835.86 62,332.38Packing Materials Consumed 5,493.04 4,441.76

Total 77,328.90 66,774.14

23 CHANGES IN INVENTORIES OF FINISHED GOODSWORK-IN-PROGRESS AND STOCK-IN-TRADE:

` lacsFor the For the

year ended year ended31st March, 31st March,

2013 2012Opening Stock

Finished Goods - Own Manufacured 13,371.59 13,702.34Finished Goods - Traded 2,316.77 714.26Work in Progress 953.84 648.12

16,642.20 15,064.72Closing Stock

Finished Goods - Own Manufacured 15,101.91 13,371.59Finished Goods - Traded 1,899.98 2,316.77Work in Progress 732.96 953.84

17,734.85 16,642.20

Net Increase (1,092.65) (1,577.48)


106

RALLIS


24 EMPLOYEE BENEFITS EXPENSE:(Refer Note No. 37)

` lacsFor the For the

year ended year ended31st March, 31st March,

2013 2012a. Salaries and Wages 7,947.64 7,603.70b. Contribution to Provident and Other Funds 488.78 473.49c. Gratuity 128.56 308.82d. Staff welfare 874.45 859.98

Total 9,439.43 9,245.99

25 OTHER EXPENSES` lacs


2013 2012Freight, Handling and Packing 3,754.75 3,013.52Processing 1,408.21 1,152.04Changes in Excise Duty on Inventory of Finished Goods (138.74) 199.05Travelling 1,348.87 1,034.22Power and Fuel 4,856.76 4,341.23Brand Equity Contribution 180.41 156.60Repairs :

to Machinery 689.71 560.20to Buildings 99.69 113.92Others 305.40 443.26

Stores and Spares Consumed 514.12 487.88Rates and Taxes 277.71 316.26Bad Debts 303.45 320.45Cash Discount 3,476.47 3,025.84Commission 66.60 53.30Insurance 226.24 206.49Rent 1,196.23 807.75Bank Charges 220.54 262.87Directors’ Fees & Commission 335.75 288.85Provision for Doubtful Debts/Advances 121.99 25.43

Less : Provision for doubtful debts written back (303.45) (320.45)Selling Expenses 3,227.94 2,544.91Legal and Professional 678.42 584.52Net Loss on Foreign currency transactions and translation 429.72 995.94(other than considered as finance cost)Pre-operative Expenses Capitalised - (150.62)Other Expenses 4,257.04 3,552.95

Total 27,533.83 24,016.41

26 FINANCE COSTS` lacs


2013 2012Interest expense on:

Borrowings 1,131.40 926.81Other interest 650.53 480.45

Net (gain)/Loss on Foreign Currency transactions and translation 66.77 52.01

Total 1,848.70 1,459.27

107

27 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR):

(i) Contingent Liabilities: ` lacs


a. Demands contested by the Group:

- Sales Tax 2,000.40 2,158.63

- Excise Duty 360.84 360.84

- Customs Duty 144.10 149.50

- Income Tax 6,953.30 6,655.04

- Service Tax 65.21 42.14

- Property Cases 47.36 47.36

- Labour Cases 243.55 109.00

- Other cases 109.56 472.01

- Number of cases where amount is not quantifiable 41 Nos.(Previous Year 41 Nos.)

b. Guarantees # - 3.10

c. Other money for which the Group is contingently liable:

- Bills Discounted (fully covered by buyer’s letters of credit) 1,547.36 104.10

11,471.68 10,101.72

Notes :(i) # Other guarantees issued by Bank for which the Group is contingently liable. These are covered by the charge

created in favour of Group’s bankers by way of hypothecation of stock and debtors.(ii) The Group does not expect any liability in respect of items (a), (b) and (c ) to devolve in respect of its

exposure and therefore no provision has been made in respect thereof.(ii) Other Commitments

A. During the financial year 2010-11, the Company had acquired a majority of the equity shares of MetahelixLife Sciences Limited (Metahelix). Besides, the shares already acquired, it has made the following commitments:(a) to acquire shares from certain shareholders (other than founder shareholders) 2,591 equity shares for an

amount aggregating ` 506.77 lacs. (previous year 2,591 equity shares held by them for an amountaggregating ` 506.77 lacs.)

(b) to allow the founder shareholders, a put option exercisable over a period of 3 years (Previous Year: 4years), 8,433 shares held by them for an amount aggregating ` 1,649.11 lacs (Previous Year: 11,244 sharesfor an amount aggregating ` 2,199.21 lacs).At the end of 3 years, the Company has a call option to acquire the balance shares held by the foundershareholders, at the fair market value as at the date of exercise.

B. During the financial year 2012-13, the Company has acquired 12,956 equity shares of Zero Waste AgroOrganics Private Limited (ZWAOPL) for an amount aggregating to ` 1,000.07 lacs. Besides, the shares alreadyacquired, it has made the following commitments:(a) Investment of ` 1,900.03 lacs in respect to ZWAOPL effectively taking the shareholding of Rallis to

50.06%.C. Estimated amount of contract with minimum commitment for plant activity ` 2,250.50 lacs (Previous

Year ` 383 lacs).D. Estimated amount of contracts remaining to be executed on capital account of tangible assets is ` 1,043.03

lacs (Previous Year ` 1,881.26 lacs) against which advances paid aggregate ` 229.74 Lacs (Previous Year ` 213.90lacs) and Intangible assets is ` 12.80 lacs (Previous Year ` 95.79 lacs).

E. For derivatives and lease commitments, refer note no 35 and 28 respectively.


108

RALLIS


28 The Group has procured motor vehicles under non-cancellable operating leases. Lease rent charged to the Statement ofProfit and Loss during the year is ` 427.84 lacs (Previous Year ` 203.53 lacs) net of amount recovered from employees` 3.59 lacs (Previous Year ` 2.34 lacs). Disclosures in respect of non-cancellable leases are given below:

` lacs


a) Total of minimum lease payments 1,225.75 1,236.64

b) The total of future minimum lease payments undernon-cancellable operating leases for a period:

Not later than one year 470.00 372.26

Later than one year and not later than five years 755.75 864.38

c) Lease payments recognised in the statement of profit and loss for the year 427.84 203.53

The terms of operating lease do not contain any exceptional / restrictive covenants. Premises are taken by the Groupon operating leases that are cancellable.

29 OTHER EXPENSES INCLUDE AUDITORS’ REMUNERATION AS UNDER:

` lacs


Audit Fees 64.81 55.97

Tax Audit 12.40 12.21

Fees for other services 57.08 52.51

Reimbursement of out-of-pocket expenses 2.35 0.82

Service tax which is being claimed for set-off as input credit has not been included in the expenditure above.

30 The Group has incurred the following expenses on research and development activity:

` lacs


On tangible fixed assets 1,463.94 5.30

On items which have been expensed during the year 1,376.20 1,032.81

Total 2,840.14 1,038.11

During the year the Group has also incurred ` 1,248.86 lacs (Previous Year ` 992.84 lacs) towards development expenditurewhich is included under Intangible Assets under Development/Capital work in progress. The total amount included inIntangible Assets under Development/Capital work in progress as at 31st March 2012 is ` 1,094.17 Lacs (Previous Year` 2,589.61 Lacs).

Included in the foregoing is an amount of ` 422.69 lacs (Previous Year ` 618.10 lacs) paid to an external agency.

109

31 DEFERRED TAX ASSETS AND LIABILITIES:(a) The components of deferred tax assets and liabilities are as under:

` lacs

Particulars 2012-13 2011-12 2012-13 2011-12

Net Deferred tax liabilities Net Deferred tax assets

Deferred Tax AssetsOn Provision against debts and advances 1,629.93 1,646.01 -On other items 639.56 772.63 51.84 -

Total 2,269.49 2,418.64 51.84 -Deferred Tax LiabilitiesOn fiscal allowance on fixed assets 4,888.74 3,422.25 -On other items 244.88 304.85 -

Total 5,133.62 3,727.10 - -Net Deferred Tax (2,864.13) (1,308.46) 51.84 -

32 SEGMENT REPORTING:The Group has determined its business segment as “Agri - Inputs” comprising of Pesticides, Plant Growth Nutrients andSeeds. The other business segment comprises “Polymer” and is non reportable.

a. Primary Segment Information` lacs

Particulars Business Segments Total

Agri - Inputs Others (non-reportable)

REVENUETotal External Revenue 141,932.94 2,075.93 144,008.87

123,986.15 925.14 124,911.29Total Inter-Segment Revenue - - -Segment Revenue 141,932.94 2,075.93 144,008.87

123,986.15 925.14 124,911.29Total Revenue (A) 144,008.87

124,911.30

RESULTSSegment Results (B) 18,798.61 683.19 19,481.80

17,071.58 234.25 17,305.83Unallocable Income (Net of unallocable expenses) (404.41)

(907.58)

Operating Profit 19,077.39

16,398.25

Finance costs 1,848.70

1,459.27

Profit before taxation 17,228.69

14,938.98

Tax Expense (5,349.01)

(4,869.78)

Profit for the year before Minority Interest 11,879.68

10,069.20


110

RALLIS


` lacs

Particulars Business Segments Total

Agri - Inputs Others (non-

reportable)

OTHER INFORMATION

ASSETS

Segment Assets (C) 107,111.41 1,176.41 108,287.82

100,500.58 1,489.69 101,990.27

Unallocated assets 10,729.65

10,150.85

Total Assets 119,017.47

112,141.12

LIABILITIES

Segment Liabilities (D) 34,092.67 73.93 34,166.60

34,204.74 195.50 34,400.24

Unallocated Liabilities 22,307.95

22,294.24

Total Liabilities (excluding Minority Interest) 56,474.55

56,694.48

CAPITAL EXPENDITURE

Total cost incurred during the year to

acquire segment assets (E) 4,063.82 - 4,063.82

7,052.95 - 7,052.95

Total cost incurred during the year to acquire assets 4,063.82

7,052.95

DEPRECIATION

Segment Depreciation (F) 3,078.10 75.21 3,153.31

2,768.44 97.49 2,865.93

Unallocated Depreciation -

-

Total Depreciation 3,153.31

2,865.93

NON CASH EXPENSES

Segment Non-cash expenses other than Depreciation &

Amortisation (G) 4.93 - 4.93

(264.13) - (264.13)

Total Non-cash Expenses 4.93

(264.13)

Figures in italics relate to the previous year.

111

a. Secondary Segment Information:

` lacs

2012-13 2011-12

1. Segment Revenue

a. India 102,029.12 86,160.13

b. Outside India 41,979.75 38,751.17

Total 144,008.87 124,911.30

2. Segment Assets

a. India 102,030.58 97,451.65

b. Outside India 6,257.24 4,538.62

Total 108,287.82 101,990.27

All tangible and intangible fixed assets of the Company are situated in India and therefore cost incurred duringthe year for acquisition of such assets under different geographic segments is not furnished.

Footnotes:

(i) Segment Revenue includes Sales of Products less Excise Duty.

(ii) Unallocable assets include Investments, Advance Income Tax, Advance Fringe Benefit Tax, Interest Accruedon Investments and Fixed Deposits.

(iii) Unallocable liabilities includes Long Term Borrowings (includes current maturities on long-term debt),Short Term Borrowings, Provisions for Equity Dividend and tax thereon, Provision for SupplementalPayments on Retirement and Provision for Income and Fringe Benefit Tax.

(iv) Unallocable income includes income from investment activities.

(v) Unallocable expenditure includes charge in respect of Supplemental Payments on retirement valued onactuarial basis.

33 (a) OTHER LIABILITIES INCLUDE PROVISION HELD IN RESPECT OF INDIRECT TAX MATTERS IN DISPUTE:

` lacs




Total 185.21 185.21



(b) Provision for Contingencies for claims in business operation amounting to ` Nil (Previous Year: ` Nil) wasprovided for the year ended 31st March, 2013.

` lacs




Total 50.00 50.00




112

RALLIS


34 EARNINGS PER SHARE:

` lacs


Profit for the year (after adjustment of minority interest) 11,901.22 9,918.19

Weighted average No. of Equity Shares for Basic / Diluted EPS (Nos) 194,468,890 194,468,890

Nominal Value of Equity Per Share (in `) 1.00 1.00

Basic / Diluted Earning Per Share (in `) 6.12 5.10

35 FOREIGN CURRENCY EXPOSURES :

The Group, in accordance with its risk management policies and procedures, enters into foreign currency forwardcontracts and currency option contracts to manage its exposure in foreign exchange rate variations. The counter partyis generally a bank. These contracts are for a period between one day and four years.

Derivative Instruments:

The Group uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuationsrelating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts isgoverned by the Group’s strategy approved by the Board of Directors, which provide principles on the use of suchforward contracts consistent with the Group’s Risk Management Policy. The Company does not use forward contractsfor speculative purposes.

(a) The following derivative instruments are outstanding as at balance sheet date:

i) Outstanding Forward Exchange Contracts entered into by the Group:


Number of ` lacs Amount Number of ` lacs AmountContracts in Lacs Contracts in lacs

Receivables 6 1,711.34 USD 31.52 11 3,179.91 USD 62.44

2 434.88 AUD 7.68 1 172.49 AUD 3.30

Payables 2 1,583.75 USD 29.17 26 4,869.91 USD 95.7

5 1,698.23 JPY 2,944.10 6 1,878.44 JPY 3,031.60

Note: USD = US Dollar; JPY = Japanese Yen; AUD = Australian Dollar.

ii) The following is the outstanding currency option contract, which has been designated as Cash Flow Hedges:

Foreign Currency As at 31.03.2013 As at 31.03.2012

Number of Notional Fair Value Number of Notional Fair ValueContracts amount of Gain/ Contracts amount of Gain/

currency (Loss) currency (Loss)option option

contracts ` lacs contracts ` lacs

USD Nil Nil Nil 1 29.50 lacs (96.74)

USD = U.S. Dollar

The net loss on the derivative instrument of ` 63.40 lacs (net of Deferred Tax Asset of ` 30.45 lacs) recognised in2011-2012 in the Hedging Reserve Account has been recycled in the Statement of Profit and Loss in 2012-2013.

113

(b) The year end foreign currency exposures that were not hedged by a derivative instrument or otherwise are givenbelow.

i) Amounts receivable in foreign currency on account of the following: -



Exports of goods and services USD 79.09 USD 26.10

4,107.09 AUD 5.35 1,625.85 AUD 5.50

EUR 0.47 EUR 0.10

ii) Amounts payable in foreign currency on account of the following: -



Imports of goods and services USD 99.98 USD 136.50

5,744.58 JPY 317.37 7,049.38 JPY 93.40

EUR 0.02 EUR 0.70

Customer Advances 175.04 USD 3.22 2.10 USD 0.05

Note: USD = US Dollar; EUR = Euro; JPY = Japanese Yen; AUD = Australian Dollar.

36 RELATED PARTY DISCLOSURES :Disclosure as required by Accounting Standard (AS) - 18 “Related Party Disclosures” as prescribed under section 211(3C) of the Companies Act, 1956.(a) Names of the related parties and description of relationship:

(i) Holding/Ultimate Holding Company : Tata Chemicals Limited(ii) Key Management Personnel : Mr.V.Shankar - Managing Director & CEO

b) Details of Transactions:` lacs

Nature of Transactions Holding Key TotalCompany Management

PersonnelPurchase of Goods 126.77 - 126.77

200.95 - 200.95Sales of Goods 3,661.06 - 3,661.06

2,924.12 - 2,924.12Services Received 32.42 - 32.42

69.91 - 69.91Services Given 44.43 - 44.43

28.01 - 28.01Other Expenses 12.63 - 12.63

0.03 - 0.03Dividend Paid (Equity) 2,141.52 - 2,141.52

2,044.17 - 2,044.17Debit Balance outstanding as 99.47 - 99.47at year end - Other Receivables

73.03 - 73.03Credit Balance outstanding as 685.59 - 685.59at year end - Other Payables

346.26 - 346.26Remuneration Paid - 241.73 241.73

- 216.73 216.73Figures in italics relate to the previous year.


114

RALLIS


37 EMPLOYEE BENEFIT OBLIGATIONS:

Defined–Benefits Plans:The Group offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount) and asupplemental pay scheme (a life long pension). The gratuity scheme covers substantially all regular employees, whilesupplemental pay plan covers certain executives. In the case of the gratuity scheme, the Group contributes funds toGratuity Trust, which is irrevocable, while the supplemental pay scheme is not funded. Commitments are actuariallydetermined at year-end. The actuarial valuation is done based on “Projected Unit Credit” method. Gains and losses ofchanged actuarial assumptions are charged to the Statement of profit and loss.The net value of the defined-benefit commitment is detailed below:

` lacs


ded Plan) ded Plan)

2012-13 2011-12

Present Value of 1,683.19 1,577.46 3,260.65 1,508.11 1,494.66 3,002.77Commitments

Fair Value of Plans 1,540.00 - 1,540.00 1,238.35 - 1,238.35

Net liability in thebalance sheet 143.19 1,577.46 1,720.65 269.76 1,494.66 1,764.42

Defined Benefit Obligation :` lacs


ded Plan) ded Plan)

2012-13 2011-12

Opening balance as 1,508.11 1,494.66 3,002.77 1,541.82 1,562.49 3,104.31at 1st April

Past Service Cost - - - - - -

Current Service Cost 158.90 124.96 283.86 131.15 10.31 141.46

Interest expenses 124.79 123.31 248.10 130.68 127.56 258.24

Paid benefits (102.12) (230.33) (332.45) (388.51) (144.18) (532.69)

Actuarial (gain)/loss (6.49) 64.86 58.37 92.98 (61.52) 31.46

Closing balance asat 31st March 1,683.19 1,577.46 3,260.65 1,508.11 1,494.66 3,002.77

Plan assets: Gratuity :` lacs


Opening balance as at 1st April 1,238.35 1,469.68

Expected return on scheme assets 106.45 118.64

Contributions by the Group 255.13 111.18

Paid funds (102.12) (388.51)


Balance with the Trust as at 31st March 1,540.00 1,238.35

Closing balance as at 31st March 1,540.00 1,238.35

115

Investment Details:` lacs


Debentures 772.33 397.36

Equity - 258.57

Government Securities 350.53 305.33

Deposits, Money market Securities & Other Assets 95.12 47.74

Other – Fund managed by other insurer whose pattern of investment 247.69 154.97is not available with the Company

Others 74.33 74.38

Total Asset 1,540.00 1,238.35

The plan assets are managed by the Gratuity Trust formed by the Company. The Management of funds is entrustedwith the Life Insurance Corporation of India and HDFC Standard Life Insurance Company Limited.

Return on plan assets: - Gratuity` lacs


Expected return on plan assets 106.45 118.64


Actual return on plan assets 148.64 46.00

Expenses on defined benefit plan:` lacs


ded Plan) ded Plan)

2012-13 2011-12

Current service costs 158.90 124.96 283.86 131.15 10.31 141.46

Past service cost - - - -

Interest expense 124.79 123.31 248.10 130.68 127.56 258.24

Expected return on (106.45) (106.45) (118.64) - (118.64)investment

Net actuarial (48.68) 64.86 16.18 165.63 (61.52) 104.11(gain) / loss

Expenses charged 128.56 313.13 441.69 308.82 76.35 385.17to the statement ofprofit and loss

The actuarial calculations used to estimate defined benefit commitments and expenses are based on the followingassumptions which if changed, would affect the defined benefit commitment’s size, funding requirements andpension expense.


Rate for discounting liabilities 7.90% to 8.60% p.a. 8.25% to 8.60% p.a.

Expected salary increase rate 8.00% p.a. 8.00% p.a.

Expected return on scheme assets 8.70% to 9 % p.a. 8.60% to 9 % p.a.

Mortality rates Indian Assured LivesMortality (2006-08) Ultimate LIC 1994-96 ultimate table

The estimates of future salary increases, considered in the actuarial valuation, take into account inflation, seniority,promotions and other relevant factors such as supply and demand in the employment market.


116

RALLIS


Experience adjustment:(a) Gratuity:

` lacsParticulars 2012-13 2011-12 2010-11 2009-10 2008-09Defined benefit obligation 1,683.19 1,508.11 1,541.81 1,501.24 1,238.59Plan asset 1,540.00 1,238.35 1,469.69 1,341.60 605.77Surplus/(Deficit) (143.19) (269.76) (72.13) (159.64) (632.82)Experience adjustment onplan assets gain /(loss) 42.19 (72.64) (3.79) (34.54) (146.09)Experience adjustment onplan liabilities (gain)/ loss (6.49) 92.98 (78.81) (19.50) 25.81

The contributions expected to be made by the Group during the financial year 2012-13 amount to `129.20 lacs.

(b) Supplemental Pay:` lacs

Particulars 2012-13 2011-12 2010-11 2009-10 2008-09Defined benefit obligation 1,577.46 1,494.66 1,562.49 1,572.68 1,567.17Plan asset - - - - -Surplus/(Deficit) (1,577.46) (1,494.66) (1,562.49) (1,572.68) (1,567.17)

Experience adjustment on plan assets - - - - -

Experience adjustment on plan liabilities 64.86 (61.52) 21.19 63.94 (79.49)

Defined-Contribution Plans:

Amount recognised as expense and included in Note No.24 - “Contribution to Provident and Other Funds” - ` 488.78lacs (Previous year ` 473.49 lacs).

38 Statement pursuant to exemption under Section 212 (8) of the Companies Act, 1956 relating to subsidiary companies:-` lacs

Name of Subsidiary Rallis Chemistry Metahelix Life Dhaanya Seeds Zero Waste AgroCompany Exports Ltd Sciences Ltd Ltd. @ Organics Private

Limited #Country India India India Australia

Year 2012-13 2012-13 2012-13 2012-13Capital 5.00 10.57 257.25 5.68

5.00 10.57 257.25 -Reserves (15.85) 6,010.41 119.80 388.31

(11.75) 5,893.23 (171.97) -Total Assets 7.94 6,420.01 12,279.51 594.20

12.02 6,260.29 9,292.90 -Total Liabilities 7.94 6,420.01 12,279.51 594.20

12.02 6,260.29 9,292.90 -Turnover - 1,249.77 14,118.86 250.33

- 1,029.56 9,779.72 -Profit/(loss) before taxation (4.08) 115.59 266.77 (151.54)

(4.02) 322.87 119.61 -Provision for taxation - - - 48.32

- - - -Profit/(loss) after taxation (4.08) 115.59 266.77 (103.22)

(4.02) 322.87 119.61 -

# Turnover, Profit/(Loss) before taxation, Provision for Taxation and Profit/(Loss) after Tax shown above is for the period01/04/2012 to 31/03/2013. However same is considered on a proportionate basis for the purposes of Consolidationfrom the date of acquisition as disclosed in Note 1(a) of Schedule 19 based on the consolidated financial statements ofZero Waste Agro Organics Private Limited.

@ Dhaanya Seeds Ltd is a subsidiary of Metahelix Life Sciences Ltd.

117

39 Acquisitions made during the year:-

During the year, the Company has acquired / subscribed to shares comprising 22.81% of the equity shares of ZeroWaste Agro Organics Private Limited (ZWAOPL). Rallis India Limited has certain rights under the Shareholder Agreementwhich requires ZWAOPL to be treated as a subsidiary of the Company and hence it is consolidated.

The financial position and result of the above acquired entity which is included (Before Elimination) in the consolidatedfinancial statement is given below:

` lacs

Particulars Zero Waste Agro Organics Private Limited

As at 31st March, 2013

LIABILITIES

Trade payables 80.07

Other current liabilities 120.14

ASSETS

Tangible assets 80.29

Deferred tax assets (Net) 51.84

Long-term loans and advances 87.65

Inventories 331.23

Cash and cash equivalents 15.80

Short-term loans and advances 27.39

INCOME

Revenue from operations 250.33

Other income 0.06

EXPENSES

Manufacturing and other expenses 391.86

Finance costs 0.08

Depreciation and amortization expenses 9.99

Provision for Tax (48.32)

40 The Group has invested ` 880.00 lacs in Non-Convertible Debentures (“NCDs”) of Advinus Therapeutics Ltd. having acoupon rate of 4.25%. The NCDs will be redeemed between December 2010 and May 2013 at a premium of 25%.Income recognised during the year includes ` 28.49 lacs (Previous Year ` 22.72 lacs) in respect of redemption premiumdetermined on the basis of the internal rate of return. During the year debentures amounting to ` 296.15 lacs (PreviousYear ` 290.40 lacs) were redeemed at a 25% premium which aggregated ` 74.04 lacs (Previous Year ` 72.60 lacs).

41 Previous years’s figures have been regrouped / restated wherever necessary to conform to the classification of thecurrent year.

R. GOPALAKRISHNAN Chairman

B. D. BANERJEEE. A. KSHIRSAGARPRAKASH R. RASTOGI V. SHANKAR Managing Director & CEOBHARAT VASANI DirectorsK. P. PRABHAKARAN NAIRR. MUKUNDANYOGINDER K. ALAGH P. S. MEHERHOMJI Company Secretary


}


118

RALLIS


NOTES

C M Y K

RALLIS INDIA LIMITEDRegistered Office 156/157 15TH FLOOR NARIMAN BHAVAN 227 NARIMAN POINT MUMBAI 400 021

Attendance Slip

I hereby record my presence at the SIXTY-FIFTH ANNUAL GENERAL MEETING of the Company at Auditorium, Yashwant RaoChavan Pratishthan, Chavan Centre, General Jagannath Bhosale Marg, Mumbai 400 021, on Monday, the 24th June, 2013at 4.00 p.m.

SIGNATURE OF THE ATTENDING MEMBER/ PROXY

NOTES:1. Shareholder/ Proxyholder wishing to attend the meeting must bring this Attendance Slip to the meeting and hand it overat the entrance duly signed.

2. Shareholder/ Proxyholder desiring to attend the meeting should bring his/ her copy of the Annual Report for reference atthe meeting.

RALLIS INDIA LIMITEDRegistered Office 156/157 15TH FLOOR NARIMAN BHAVAN 227 NARIMAN POINT MUMBAI 400 021

Proxy

I/We .........................................................................................................................................................................................................................................................................

of ................................................ in the district of .................................................................................................................................................................... being

a Member/ Members of the abovenamed Company, hereby appoint ........................................................................................................................................

.................................................................................................................... of ............................................................................................................... in the district of

......................................................... or failing him ..................................................................................................... of ......................................... in the district of

............................................................................................................................... as my/ our Proxy to attend and vote for me/ us and on my/ our behalf

at the Sixty-fifth Annual General Meeting of the Company, to be held on Monday, the 24th June, 2013 at 4.00 p.m. or at any

adjournment thereof.

Signed this .......................................................................................... day of ............................................................................................................................. 2013

Reference Folio No.:

DP ID/BEN ID: Signature

No. of Shares held:

This form is to be used *In favour of the resolution. Unless otherwise instructed, the Proxy will vote as he thinks fit.* against

* Strike out whichever is not desired.

NOTE: The Proxy must be returned so as to reach the Registered Office of the Company, at 156/157, 15th Floor, Nariman Bhavan,227, Nariman Point, Mumbai 400 021, not less than FORTY-EIGHT HOURS before the time for holding the aforesaid Meeting.

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Date post:	24-Jul-2018
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